New Delhi: Indian healthcare firm Fortis Monday said it was opting out of the battle for control of Singapore-based Parkway, which operates 16 hospitals with over 3,400 beds in Asia, paving the way for rival Khazanah of Malaysia to buy the firm.
Fortis Chairman Malvinder Mohan Singh said the group has accepted the offer to sell its 25-percent shares in Parkway to Malaysian state-run fund Khazanah for Singapore $3.95 per share, saying it was getting a good deal.
Fortis is expected to make a profit of around Singapore $100 million from selling its 284.22 million shares in Parkway.
"We certainly believe that Parkway is a good asset. At the same time every asset has an intrinsic value. So, there comes a point at which we at Fortis believed it was better for us to divest this asset," he told a press conference here Monday.
"We will continue to look at other substantial growth opportunities within India, Asia and also at the global level. Since we made our investment in Parkway, we have been offered tremendous opportunities for partnerships and alliances in the region.
"We will certainly continue to explore these opportunities. Singapore will continue to be our hub for international expansion. We are also looking at listing Fortis in Singapore so that we have another listing in Asia, which is a strong emerging market."
The development saw the shares of Fortis rise 6.8 percent on the Bombay Stock Exchange (BSE) to touch an intra-day high of Rs.162.20. Some 15 minutes after the announcement, it was ruling at Rs.158.60, up 4.45 percent over the previous close.
Fortis was controlling Parkway with four of its nominees among 12 directors, including Malvinder Singh. The Malaysian fund, officially called Khazanah Nasional Berhad, had 24 percent stake and was looking at a complete buy-out, initially resisted by Fortis.
"Malvinder Mohan Singh, (younger brother) Shivinder Mohan Singh, Sunil, Godhwani and Balinder Singh Dhillon resign as directors of the company," the group said in a regulatory filing with the Singapore Stock Exchange, where Parkway is listed.
The Indian firm, too, had made an open offer for 51-percent stake in Parkway at Singapore $3.78 per share which was pipped significantly by Khazanah's offer at Singapore $3.95.
Kazanah's perceived victory in the battle for control for Parkway would portend well for another healthcare company Apollo, since it has a 12 percent stake in the company and is its third-largest shareholder.
For Malvinder Mohan Singh and family, the deal comes after Fortis bought 10 hospitals from Wockhardt in India for $180 million after selling their 34.8-percent stake in the pharmaceuticals major Ranbaxy to Japan’s Daiichi Sankyo for $2.4 billion.
The group commissioned its first hospital in 2001 at Mohali, near Chandigarh, and has expanded its operations to become a network with an approximately 8,000-bed capacity across 48 hospitals in India.
With Fortis exiting Parkway, Prathap C. Reddy-controlled Apollo is once again the largest healthcare chain in Asia with a network of 46 hospitals with 8,065 beds.
Incidentally, Parkway and Apollo have a joint venture in India, that operates a 325-bed multi-speciality hospital in Kolkata, called Apollo Gleneagles Hospital, spread over a lush landscape of 8.5 acres.
First Published: Monday, July 26, 2010, 14:45