Financial Times

Stockmarket sources said last week that business tycoon Harry Jayawardena’s offer to take control of Apollo Hospital is unlikely to succeed with his mandatory offer ending in a week.

Property Development Ltd (13.62 percent) and Apollo Hospitals in India (32 percent) who together hold large stakes with director N. Ratnaraja who holds 3.23 percent are expected to ‘act in concert’ and not accept the offer, the sources said.

Jayawardena upped his stake to 36.07 percent from the earlier 20 percent through Sri Lanka Insurance triggering the Takeovers and Mergers Code under which he made a mandatory offer. The move led to the Board of Investment saying it would slash concessions to the hospital company if the ownership changes hands. The industry and the stock market went into overdrive about the legality of this move, but the BOI remains resolute. “These are special concessionary requirements granted to ‘a’ specific company. If there is a takeover bid, we will take away the concessions. It is perfectly legal,” Laxman R. Watawala, Chairman BOI told The Sunday Times FT. Sri Lanka Insurance life and general funds paid Rs. 700 million to Dr. T. Senthilverl who also served on the Apollo hospitals Board to make Jayawardena the largest shareholder of the company. The mandatory offer for the remainder of the shareholding is at Rs. 28 each. “Jayawardena will face stiff resistance from the PDL and the Indian parties and this is a futile attempt,” an analyst said.