Malaysian state investor Khazanah trumped India's Fortis Healthcare in a takeover battle for Singapore's Parkway with an offer that values Asia's biggest listed hospital operator at $3.3 billion.
Khazanah -- in its biggest acquisition overseas -- said it was offering around S$3.95 ($2.88) per share for all Parkway shares it does not own, topping the S$3.80 offered by Fortis, confirming an earlier Reuters story.
Fortis said it accepted the offer and would use the S$116.7 million profit on its Parkway stake to look for other opportunities in the region.
"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," Shivinder Singh, managing director and one of the two billionaire Singh brothers who control Fortis told reporters in New Delhi.
Khazanah and Fortis, which both own around a 25-percent stake in Parkway each, had wrangled for more than two months over the Singapore firm that both were eyeing to spearhead their regional expansion in the region's booming healthcare market. Parkway runs hospitals in Singapore, Malaysia, India and China.
Shares of Fortis, controlled by Shivinder Singh and his brother Malvinder, had surged over 6 percent in Mumbai just ahead of the Khazanah confirmation.
Parkway shares were suspended on Monday pending the announcement by Khazanah and closed at S$3.88 on Friday. The price of S$3.95 would be the highest for its shares since October 2007.
"This is a good price for investors to cash out," said Lynette Tan, an analyst at DMG & Partners in Singapore, referring to the offer price.
"The change in ownership won't make much difference to Parkway's future growth strategy or operations because Khazanah was already a large shareholder."
Nomura Securities says the deal values Parkway at 31 times 2010 earnings against peer Raffles Medical'sRAFG 22 times.
Malvinder Singh, chairman of both Fortis and Parkway said in a statement the deal took into account all the stakeholders of Fortis.
"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," he said.
Khazanah said it would try to maintain Parkway's listing on the stock exchange.
Fortis bought a 24 percent stake in Parkway from buyout firm TPG in March for around S$3.56 a share and subsequently added more shares from the open market.
Khazanah, which has a portfolio of $28 billion, is also looking to raise loans through DBS, UOB and OCBC. It also plans to sell Singapore dollar sukuk or Islamic bonds, according to banking sources who could not be identified because the sale is not public.
Deutsche Bank and CIMB were advising Khazanah and Fortis was being advised by Macquarie and RBS. Morgan Stanley is acting as an independent adviser to Parkway.