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November 29, 2007 |
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SYMBION HEALTH: Healthscope Buys 10% Stake After ATO Ruling After the Australian Tax Office ruled out that Symbion Health Ltd. shareholders could not benefit from a merger and scrip-for- scrip capital gains tax rollover relief, Healthscope Ltd. surprised the market by buying shares in Symbion, Teresa Ooi writes for The Australian. According to the Wall Street Journal, Healscope acquired a 10% stake in Symbion. Healthscope, refusing to lie low, spent about AU$250 million to buy 64.7 million Symbion shares at an average price of AU$4.09 a share, relates The Australian. According to the report, this move by Healthscope makes it the second-biggest shareholder in Symbion, following Primary Health Care's 20% stake. Healthscope's Bruce Dixon is said to be "happy to sit at 10%, but is not ruling out increasing its stake further," Ms. Ooi writes, citing a source close to the deal. One analyst expressed to The Australian that, ". . .with a 10 per cent stake in Symbion, Healthscope has now denied Primary from compulsorily acquiring Symbion. It would also make it tougher on Bateman to raise funds or on-sell the pharmacy and vitamin business to private equity firms." The ATO ruling, WSJ relates, leaves Primary as the only bidder left to acquire Symbion's pathology, diagnostic imaging and medical centers assets. However, Symbion's board of directors asserted that Primary's AU$2.65-billion offer is too low and well below market value, reports The Australian. Matthew Murphy of The Age writes that Primary is believed to be considering staying with its current bid or even lowering it now that ATO rebuff has strengthened its position. The report notes that Symbion Chief Executive Office Robert Cooke said Primary could afford to pay at least AU$4.50 a share for Symbion but added that their business is not in distress so they don't "feel any operational pressure to sell their assets cheaply. Mr. Cooke further added, "The pressure is on other parties who are interested in a transaction whether it is Healthscope, Primary singularly or collectively." According to a Healthscope spokesman interviewed by Ms. Ooi, the company has not ruled out making a deal with Primary to carve up Symbion's assets. "We are keeping all options open. We are very patient," adds the spokesman. The Australian Securities & Investments Commission, relates The Age, is investigating whether Healthscope obtained the share parcel fairly. Dr. Edmund Bateman of Primary kept his own counsel and declined to comment on the matter, explains The Australian. About Symbion Health Symbion Health Limited, headquartered in Melbourne, is a diversified Australian domestic health care business. Most of its earnings are derived from the provision of pathology and diagnostic imaging services. The company also manufactures and markets vitamin and mineral supplements (consumer nutriceuticals). In addition, it operates a wholesale medical products distribution network, focusing on the distribution of prescription drugs to pharmacies and hospitals. * * * On Jan. 30, 2007, Moody's Investors Service placed the Ba1 issuer rating of Symbion Health Limited on review for possible downgrade after the company's announcement that it has received an ownership proposal from Primary Health Care Limited (unrated). |
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