Primary Health Care Raises Pressure On Symbion Bid

The Age

Thursday February 7, 2008

Nabila Ahmed

THE fate of Symbion should be sealed within days, after suitor Primary Health Care increased the pressure by announcing it would not raise its $2.7 billion cash offer.

Primary also said its bid would become unconditional if it could secure at least 50.1% acceptance for its offer "by the end" of next Tuesday.

If it cannot declare its offer unconditional, Primary, whose offer is scheduled to close on February 21, will, in the absence of a competing offer, walk away from the assets it has coveted for years and actively chased for the past 12 months.

The Symbion board, which has consistently recommended that shareholders reject Primary's offer, was locked in a meeting last night trying to formulate a response to Primary's announcement.

Symbion shareholder Argo Investment's Rob Patterson urged the Symbion board to consider recommending Primary's offer. "I think, given the changed circumstances in financial markets, the offer looks reasonable to us," Mr Patterson said.

Primary now controls 45.59% of the stock in Symbion.

Primary boss Ed Bateman told the market last night that his cash offer of $4.10 a share was above Symbion's independent expert's valuation of the company at between $3.52 and $3.91 a share.

"Symbion shareholders now have a clear opportunity to receive the benefits of Primary's attractive cash offer. The attractiveness of Primary's cash offer has been reinforced by the recent sharemarket fall of over 15% since November 2007," Dr Bateman said.

"Primary's increasingly attractive cash offer is the only offer available to all Symbion shareholders and will not be increased in the absence of a competing offer."

Late last year, Primary also said it would declare its offer unconditional should it achieve acceptances of 50.1% but failed to achieve the target by the deadline.

The battle for Symbion has entered its 13th month, with last year's original bidder, Healthscope, still lurking on the periphery, trying to pick up pathology assets.

Healthscope's initial $2.8 billion bid, made jointly in January last year with private equity groups Ironbridge and Archer Capital, was thwarted late last year when Primary voted its 20% stake against the offer.

When the Australian Tax Office killed Healthscope's second try, Primary had already launched its own $4.10 cash offer. Healthscope, which owns 11.9% of Symbion, began talking to Primary last month about a carve-up of the assets.

© 2008 The Age

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