Friday, August 6, 2010

Khazanah wins Parkway battle with S$3.5b bid

The two month long tussle between Khazanah Nasional Bhd and Fortis Healthcare Ltd to control Singapore-listed Parkway Holdings Ltd finally came to an end yesterday as Fortis accepted Khazanah's voluntary conditional general cash offer (VGO) and decided to divest all its holdings in Parkway.

The deal, costing the national investment arm S$3.5 billion as it upped the offer price to S$3.95 per share, is seen by some analyts as the higher end of Parkway's valuation, but one worth paying if it could extract value from the healthcare giant with more than 3,400 hospital beds in China, india and Malaysia.

The deal will see Fortis -- controlled by two billionaire Singh brothers, Malvinder Mohan Singh and Shivinder Singh -- walk away with a profit of S$116.7 million.
Yesterday, in a filing with the Singapore Exchange (SGX), Khazanah subsidiary Integrated Healthcare Holdings Ltd (IHH) announced a revision of its offer to a voluntary onditional general cash offer (VGO) for all of the shares in Parkway, topping its May 27 offer by 17 Singapore cents.

"Khazanah will be paying quite a high price earnings ratio of 45 times to 46 times based on her financial year 2010 estimate,” said DMG & Partners Research Lynette Tan on the new offer.

Nomura Securities Singapore analyst Lim Jit Soon said Khazanah is paying the upper end of the price at RM3.95 per share, but it is not a question of overpaying.
“It all depends on how much value the buyer can extract from the the deal,” he said.

(The Malaysian Reserve, July 27, 2010)

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