Singapore: Singapore’s securities regulator has given Fortis Healthcare until 30 July to say whether it intends to make a full offer for hospital operator Parkway Holdings.
Wednesday’s statement from the Securities Industry Council (SIC) came a day after Fortis Healthcare said it was keeping its options open over a counterbid for Parkway, the subject of a partial takeover bid by Malaysian sovereign fund Khazanah.
Fortis, which already holds roughly 25% of Parkway, will have to offer over $2.3 billion to buy the rest of it.
Fortis had wanted to build a controlling stake in the Singapore company before Khazanah made a surprise $835 million offer last month to lift its stake from 23.5% to 51.5%.
Both Fortis and Khazanah want to use the Singapore firm to spearhead their regional expansion into healthcare.
“Parkway shareholders should be given sufficient information, advice and time to enable them to reach an informed decision on the partial offer,” SIC said in a statement.
Fortis has appointed Australia’s Macquarie and Indian financial services group Religare to help it raise funds for a possible counterbid, sources told Reuters on Tuesday.
An SIC spokesman said Khazanah had the option to extend the closing date for its partial offer from 8 July until 10 days after 30 July in order to give shareholders a chance to assess their options.
The SIC said under Singapore rules, a party has 50 days to decide whether to make a counterbid from the date an offer document by a rival party is despatched to shareholders. Integrated Healthcare, the Khazanah unit, sent out its offer document on 10 June.
“Everyone on the street is expecting Fortis will counterbid, but they have not come out with details,” said an analyst who asked not to be named because of his firm’s media policy. “This statement will put more pressure on Fortis.”
“The market expects the counteroffer will be 10-15% above Khazanah’s offer price, which will put the price around S$4-S$4.20,” the analyst said.
Fortis is controlled by billionaire brothers Malvinder and Shivinder Singh, who sold their controlling stake in Indian drugmaker Ranbaxy Laboratories to Japan’s Daiichi Sankyo two years ago.
The Singhs have a fortune estimated by Forbes at $3 billion, while Khazanah has about $28 billion in assets.
“It will be difficult for Fortis to sustain if the situation were to lead to a price war,” said Ranjit Kapadia, an analyst with Mumbai-based HDFC Securities.