Wednesday, June 23, 2010

#Flash*Morgan Stanley: Khazanah offer for Parkway not compelling

KUALA LUMPUR: Morgan Stanley Asia (Singapore) Pte, which is the independent adviser for Singapore-listedParkway Holdings Ltd minority shareholders, says Khazanah Nasional's offer price is not compelling.

In the circular issued by Parkway on Wednesday, June 23, Morgan Stanley said that from a financial point of view as at the latest practicable sate, although the value implied by offer price is reasonable, the offer price is "not compelling in the context of a partial offer involving a change of control".

On Monday, RiskMetrics, an independent advisory firm,'' recommended that Parkway investors approve a proposal allowing a partial takeover bid by Khazanah, according to a Reuters report.

The firm said Khazanah's offer price of S$3.78 a share exceeded Parkway's share price prior to the offer, and shareholders would still be free to decide whether or not to accept Khazanah's offer after the vote.

"This resolution, if approved, does not mean that Khazanah's partial takeover offer will be successful. This resolution, if passed, will allow the bid to be made," RiskMetrics said in a report.

To recap, shareholders of Parkway, Asia's largest hospital operator by market capitalisation, have until July 8 to approve a proposal to let Khazanah raise its stake in Parkway to 51.5% from around 24%.

July 8 is also the deadline for shareholders to accept Khazanah's partial offer for Parkway shares, although the Malaysian state investor may opt to extend the offer period amid speculation Indian healthcare firm Fortis is lining up a counter offer.

While Khazanah only needs acceptance from 27% of Parkway shareholders to gain control of the Singapore firm, it needs the go-ahead to make its partial offer from 50% of shareholders other than the Malaysian state investor.

Fortis, which owns just over 25% of Parkway, has received assurance from Indian banks including State Bank of India of up to $2 billion in loans, the Economic Times newspaper reported on Monday.

Singapore's securities regulator last week gave Fortis until July 30 to state whether it intends to make a full offer for Parkway.

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