Fortis Healthcare promoters Malvinder and Shivinder Singh on Monday exited the takeover battle to retain majority control in Singapore-based hospital chain Parkway, neatly pocketing around Rs 350 crore in the process. They decided to sell their entire equity in Parkway for around $800 million to Malaysian government?s investment arm Khazanah.
The announcement by Fortis that it has accepted Khazanah?s offer of S$3.95 per share for control of Parkway, ended the nearly two-month-old takeover battle. The development saw Fortis shares closing up 2.93% at Rs 156.30 on BSE.
Fortis, which is looking for expansion across Asia, would now look at other opportunities. ?At the end of the day, you have to take an economic call. You can?t take an emotional call on the assets you want to own,? Fortis Healthcare managing director Shivinder Singh said. He added there were plans to list Fortis International in Singapore. ?We are looking to get listed in Singapore. We have already spoken to the Singapore Stock Exchange. Singapore will be the base for our international operations.?
Once Khazanah?s open offer is complete, it would have 76% control over Parkway against the initial 51.5% it was targeting when the offer was launched two months back. With the improved offer of S$3.95 a share against the initial S$3.78, Parkway has been valued at $3.3 billion.
Fortis had picked up 23.9% stake in Parkway for about $685.3 million (nearly Rs 3,100 crore) when it bought TPG Capital?s shares in March this year. Later this increased to 25.37%, comprising 28.27 crore shares at an average share price of S$3.54. Thus the total outgo from Fortis was around Rs 3,450 crore.
By selling out to Khazanah, Fortis would get around Rs 3,800 crore, thus making an overall gain of Rs 350 crore.
Fortis chairman Malvinder Singh, who is also the chairman of Parkway, said the decision was reached after an objective assessment of the existing stake in Parkway and the final price that Khazanah offered. ?We are in the business to create value and be responsible to our shareholders.? He said the S$3.80-per-share offered by Fortis in response to Khazanah?s first offer was itself ?bit of a stress.?
Calling the deal a win-win for all involved, he said, ?It was made after careful assessment of the intrinsic value of Parkway and in light of other growth opportunities available to us across the region and globally.?
Both Khazanah and Fortis were vying for Parkway in their bid to penetrate the booming healthcare markets of Singapore, Malaysia and China. By selling out to Khazanah, Fortis becomes a debt-free company. As on June 30, the company?s debt-equity was around 0.7 to 1.
Malvinder said Fortis would now look at buying smaller assets across Asia. ?We would be looking at smaller assets across Asia, mainly in the Middle East, China and Hong Kong region, South East Asia and around the Indian sub-continent. We will be constantly looking to raise capital for that.?