The outcome of the takeover battle was on expected lines. Although the billionaire Singh brothers showed chutzpah in even making a counterbid to a sovereign wealth fund, they once again showed that business has to be run as a business and not on sentiments.

VCCircle has consistently argued that the Singh brothers' battle against a sovereign fund like Khazanah might be a losing proposition, especially in the context of south east Asian geopolitics. This was reiterated when GIC, a sovereign fund of Singapore, decided to postpone its investment into Fortis last month. VCCircle also argued that a setback in Parkway could slow the momentum of the Fortis juggernaut while translating into advantage for rival Indian healthcare firm Apollo Hospital, which already has an investment from Khazanah.

Having sprung a surprise by selling their shares in country’s dominant drugmaker Ranbaxy to Daiichi Sankyo a couple of years ago and now exiting Parkway they have stuck to their word that "at a price everything is up for sale."

While strategically its a big loss for Fortis to lose control of Parkway as it could have used it as a launchpad for building a global healthcare firm, financial analysts would read into the decision to pull out as prudent. Not surprisingly then, Fortis scrip zoomed almost 7% during intra day trading before closing at Rs 156.3 with 3% gain on Monday.

Fortis had already indicated that it was not willing to stretch itself when it made a counter bid with a marginal premium to the first offer by Khazanah and it decided to sell with a profit of $85 million opting not to go another round of counterbidding. The company could now look at a string-of-pearls strategy to expand global presence, something it has been quietly doing in a fragmented market like India. This could mean spending more time to build scale but could be easy on the balance sheet of the firm.

Meanwhile, the move could open up opportunities for Reddy’s owned Apollo Hospital for partnering Khazanah in managing the hospitals of Parkway. Although there are no such reports that the Malaysian fund has asked Apollo Hospital for such a deal, it could be an option before Khazanah as it seeks to leverage its investment in the south-based healthcare firm and build synergies for its ownership of Parkway.

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