Thursday, June 10, 2010

Parkway (Updates)

Fortis Healthcare is planning to raise 27.5bn rupees or S$830m by issuing securities. At an EGM held yesterday, Fortis shareholders approved an earlier plan to issue up to 22.35m shares on a preferential basis to a unit of the GIC, Lathe Investment, to raise 3.8bn rupees. Note that GIC currently has a 6.58% interest in Fortis. Meanwhile, its board has also approved a proposal to raise borrowing limit to 60bn rupees (or S$1.8bn).

The latest move has fuelled speculation that Fortis is gearing up for a takeover battle as the fund raising comes soon after Khazanah made a surprise S$1.18bn partial offer to acquire 313m shares in Parkway at S$3.78 which would then raise its stake from 23.8% to 51.5%. Fundamentally, fair value for Parkway remains at $4.03, based on SOTP valuation.

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