India’s Fortis Healthcare (FOHE.BO) is widely expected to outline a counter offer for Singapore hospital operator Parkway (PARM.SI) later on Thursday, in a direct challenge to Malaysian state investor Khazanah which has made a $835 million offer to control the Singapore firm. 

Parkway (PARM.SI) has requested a trading halt ahead of an announcement by the Indian firm, which could be made later in the day, sources briefed on the matter said. 

 

Fortis, controlled by Indian billionaire brothers Malvinder Singh and Shivinder Singh, owns just more than 25% of Parkway and is the controlling shareholder. 

 

But Khazanah, which has just under 24%, made its surprise US$835 million ($1.17 billion) partial offer to raise its Parkway stake to 51.5% by buying shares at $3.78 apiece. Shareholders have until July 8 to accept Khazanah’s offer. 

 

Both Fortis and Khazanah want to use Parkway, which runs 16 hospitals across Asia including Singapore, Malaysia, India and China to spearhead their regional expansion into healthcare.  

 

Fortis, which cannot make a partial offer for Parkway under because it bought shares recently, will need at least US$2.3 billion to make a general offer for the whole company.

 

“A general offer (for Parkway) at $3.78 per share would definitely be more attractive than a partial offer,” said Lynette Tan, an analyst at DMG & Partners in Singapore. 

 

But she said Khazanah's offer was “better than nothing” in the absence of a firm alternative bid from Fortis. 

 

Singapore’s security regulator has given Fortis till July 30 to state whether or not it intends to make a counterbid for Parkway, while Khazanah could extend its partial offer till after the Indian company shows its hand. 

 

On Wednesday, Glass Lewis, a U.S.-based advisory firm, recommended that Parkway shareholders vote against Khazanah's offer, warning that minority shareholders may find themselves in an untenable position if the Malaysian investor gains majority control.