The Fortis-Parkway tale

Fortis Healthcare has pulled out of the fight for Singapore based Parkway Holdings, with a profit of Rs. 380 crore on a Rs. 3400 crore investment made 4.5 months ago.

For sometime, Fortis had been looking to acquire a partner to grow in the pan Asian market. Finally in March 2010, Fortis bought TPG’s 23.9% stake in Parkway holdings, and subsequently consolidated it to 25.4% stake. The Malaysian fund Khazanah announced a partial offer to buy 27% stake at $3.78 a share to take its control of Parkway with 51.5% holding. Fortis increased their offer to buy an extra 75% of the stake at $3.8 a share. Finally on July 26, Khazanah made an offer to buy all the 76% stake at $3.95. Fortis then withdrew from the bidding competition and agreed to sell its stake to Khazanah.
This has been labelled as a very smart move by Fortis, as trying to exceed the recent Khazanah bid would have been a stretch on Fortis’ balance sheets, as even the $ 3.8 a share was a tough call. In the 4-5 months they spent on this deal, not only did they come into touch with many healthcare companies that are interested in partnering with them in Singapore and Asia, but they also made a lot of moolah for the shareholders’ benefit. They will probably soon continue with their expansion plans with a different vehicle, wiser minds and heavier pockets.
Source: The Economic Times

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