Malaysian state investor Khazanah is poised to trump an offer from India’s Fortis Healthcare (FOHE.BO) for Singapore’s Parkway (PARM.SI) in a buyout bid that values Asia's biggest listed hospital operator at US$3.3 billion ($4.51 billion).

Khazanah — in its biggest acquisition overseas — will offer around $3.95 per share for all Parkway shares it does not own, topping the $3.80 offered by rival suitor Fortis Healthcare, sources with knowledge of the deal told Reuters. 

 

The Malaysian fund’s move, if confirmed, could end over two months of tussle over a company that both are eyeing to spearhead their regional expansion in Asia’s booming healthcare market. 

 

Fortis shares surged over 4% in early trade in Mumbai. Sources familiar with the deal have said Fortis could walk away from the negotiations once Khazanah makes a formal offer but others think another round of bidding is on the cards. 

 

“There could be one more round of bidding till $4 a share. Fortis will surrender once the price moves beyond $4 a share as it will not have the financial strength to back it,” said Sapna Jhawar, analyst with Mumbai-based brokerage Sharekhan. 

 

Fortis is to hold a news conference in New Delhi at 0630 GMT. 

 

Khazanah and Fortis each currently own about 25% of Parkway, which runs hospitals in Singapore, Malaysia, India and China. 

 

“I think at a certain stage they (Fortis) would throw in the towel,” said Terence Wong, research head at DMG and Partners. 

 

“It is not that it would go to $4.50-$5.00.” 

 

Fortis bought a 24% stake in Parkway from buyout firm TPG in March for around $3.56 a share and subsequently added more shares from the open market. It will make a gross profit of about $111 million if it sells all its shares in Parkway, according to Reuters calculations. 

 

Parkway shares were suspended on Monday pending the announcement by Khazanah and closed at $3.88 on Friday. The price of $3.95 would be the highest for its shares since October 2007. 

 

“It will be a general offer,” said one of the sources who has direct knowledge of Khazanah's latest bid. 

 

Analysts had expected that Khazanah may have to pay more than $4.00 a share for Parkway to fend off Fortis. Khazanah, which has a portfolio of US$28 billion, is also looking to raise loans through DBS (DBSM.SI), UOB (UOBH.SI) and OCBC (OCBC.SI). 

 

Deutsche Bank (DBKGn.DE) and CIMB (CIMB.KL) are advising Khazanah and Fortis is being advised by Macquarie (MQG.AX) and RBS (RBS.L). Morgan Stanley (MS.N) is acting as an independent adviser to Parkway.