Financial Times - Harry J now eyes Apollo Hospitals

Corporate raider Harry Jayawardene, after a failed attempt to control Asiri Hospitals, last week was eyeing Apollo Hospital – upping his stake to 36.07 percent from 20 percent earlier in the Indian-managed entity and triggering the Takeovers and Mergers Code.

The stake was brought through Sri Lanka Insurance (SLC), as the business baron spread his interests currently in alcohol, insurance, banking, dairy products, leisure, shipping and telecom to name a few. Analysts said he was aiming to take over the board ahead of the hospital company’s AGM scheduled for August 4.

On Thursday, SLC life and general funds paid Rs 700 million for the 16 percent stake from Dr. T. Senthilverl, a director in the company. Jayawardena is now the single largest shareholder of the company after Apollo Hospitals Enterprises with 32 percent and Property Development Ltd, the holding company of the Bank of Ceylon tower, with 13.62 percent. Stock analysts said it is unlikely that these two entities together with N. Ratnaraja who holds 3.23 percent will accept the mandatory offer for the remainder of shareholding at Rs 28 each. “Jayawardena is looking for board control but if these top shareholders do not accept it, it will be decided at the AGM by the number of proxies,” an analyst said.

He said Jayawardena will aggressively increase his stakes in the health care sector considering the high earnings potential of hospitals in line with proper insurance covers. SLIC also has a 13 percent stake in Asiri Hospitals.

“There is speculation that Jayawardena plans to change the name of the (Apollo) hospital and these three entities are not in favour,” the analyst said. Ratnaraja, vice chairman of Apollo, told The Sunday Times FT that as long as Apollo manages it, the name will remain. When asked whether he will sell out, he said: ‘it’s too early to say’.