Battle for Parkway intensifies as Morgan Stanley picks up stake

Morgan Stanley picks up stake; battle for Parkway intensifies

The battle for the takeover of Singapore-based hospital chain Parkway intensified today as a unit of Morgan Stanley bought 75,000 shares of Parkway Holdings for an unidentified investment client.

Greenwich, Connecticut-based FrontPoint Management LLP, a subsidiary of Morgan Stanley Investment Management Inc., bought 75,000 shares of Parkway Holdings for S$3.83 a share, according to filing in the Singapore Stock Exchange.

Morgan Stanley said that it had bought the stock for a "discretionary investment client," without disclosing the identity.

FrontPoint paid S$3.83 or 5 cents more for Parkway than the S$3.78 a share paid by the Malaysian sovereign wealth fund Khazanah last month.

Khazanah, which holds a 23.9-per cent stake in Parkway, had launched a partial cash offer worth $835 million to increase its stake in the Singapore-based hospital chain to 51 per cent.

The move caught hospital chain Fortis Healthcare by surprise as it had acquired a 23.9-per cent stake in March 2010 in the South-east Asia's largest healthcare provider, Parkway for about $685.3 million from TPG Capital. (See: Fortis Healthcare acquires 23.9-per cent stake in Parkway Holdings for $685.3 million) 

The acquisition also gave Fortis four board seats, with Malvinder Singh, the promoter of Fortis Healthcare, becoming the chairman of Parkway and his brother Shivinder Mohan Singh becoming non-executive director along with Sunil Godhwani and Balinder Dhillon.

But Fortis is gearing up for a takeover battle and getting its war chest ready. Barely two days back on 9 June it said it would raise up to Rs2,750 crore through the securities market and secured a board approval for raising the company's borrowing limit to Rs6,000 crore. (See: Fortis Healthcare to raise Rs2,750 crore through securities market)