New Delhi:The Indian suitor for Singapore-based Parkway Holdings Ltd has a filed a complaint against its rival bidder for issuing a “misleading press release”, which gave the impression that Malaysia’s sovereign wealth fund was on track to take control of the firm.
Brothers Shivinder and Malvinder Mohan Singh, through their special investment vehicle RHC Healthcare Pte Ltd, complained to the Securities Industry Council of Singapore against Integrated Healthcare Holdings Ltd (IHH), owned by Malaysian state investment firm Khazanah Nasional Bhd. RHC Healthcare is a 51:49 joint venture between the Singhs and Fortis Healthcare Ltd, which is also promoted by them.
In what could intensify the tussle between the Singhs and Khazanah for Parkway, the complaint, filed on Thursday, relates to “misleading press release and press articles relating to level of approval and acceptances” issued by Khazanah to the Singapore Stock Exchange on Wednesday. Khazanah’s disclosure statement carried a quote from Quek Pei Lynn, director of IHH, saying that it was “pleased that the majority of Parkway shareholders who have voted to date have chosen to approve our partial offer”.
According to the complaint, a copy of which was obtained by Mint, filed by the Singhs’ law firms—Stamford Law, and Rajah and Tann—the statement gives the impression that the “latest development is a positive development for IHH, when in reality both conditions to the partial offer remain unsatisfied”. Quoting rules and principles from the takeover code, the lawyers, on behalf of RHC, urged the council to take immediate steps to direct IHH to issue a public statement to clarify and correct what it said was the mistaken impression that the Malaysian entity would be victorious in gaining control.
The IHH press release issued on Wednesday announced that as on 20 July, it had received valid votes from approximately 70% of shareholders eligible to vote on its partial offer. Of these valid votes, approximately 50.5% were to approve the partial offer. In addition, about 5% of the 313 million offer shares that Khazanah has offered to buy have been tendered as acceptances.
As per RHC’s complaint, a significant number (30%) of eligible shareholders are yet to vote.
“Khazanah also has not indicated how many shareholders voted for the partial offer before RHC announced its general offer on 1 July. Most of their votes might have been cast before RHC’s offer,” said a person closely associated with the RHC deal, who did not want to be named. Moreover, IHH’s announcement was voluntary. As per the complaint, under Singapore’s code of takeovers and mergers, there is no requirement for IHH to make an announcement. The market also reacted to the IHH announcement, with the volume of trading in Parkway shares increasing considerably during trading hours following the announcement.
In May, Khazanah, which already owned 23% in Parkway, made a partial offer to acquire an additional 28% stake for $839 million (Rs3,968.5 crore today). This came two months after Fortis acquired a 23.9% stake in Parkway for $959 million at $3.56 per share. Fortis later increased its stake to 25.37%.
The success of Khazanah’s partial offer, however, is subject to two conditions. First, that it receives, by the closing date, approval of the offer by shareholders representing more than 50% of the valid votes. Second, that it receives valid acceptances for no less than 313 million shares, which along with its existing stake in Parkway, takes its total stake to more than 50%.
Following Khazanah’s partial offer, in July, the Singhs made a counter-bid for Parkway through a general offer to acquire all of Parkway for S$3.2 billion (Rs10,976 crore today) at S$3.80 a share. While Khazanah’s offer closes on 26 July, RHC’s offer will close on 12 August.
A report in www.dealreporter.com, an online publication, said Khazanah may need to offer more than S$4.45 under the partial offer to make its offer more compelling than RHC’s for shareholders. It also says Khazanah may make an offer on 26 July that will be more than RHC’s S$3.80 per share.
Both Fortis and Khazanah declined to comment.
Shares of Fortis rose 0.53% to Rs153.15 on a day when the benchmark Sensex index of the Bombay Stock Exchange gained 0.76% to close at 18,113.15 points.