Australian healthcare provider Symbion Health said on Tuesday it would press ahead with a revised tie-up plan with Healthscope, despite opposition from its major shareholder.
Symbion said the deal to split the company by selling its medical testing assets to Healthscope and then selling the rest of its business to private equity could still succeed despite the opposition of Primary Health Care, which holds a 20 percent stake in Symbion.
Primary said on Monday it would oppose both legs of the revised proposal, which was announced earlier this month after Primary in September scuttled Healthscope's planned A$2.9 billion (US$2.6 billion) takeover of Symbion.
Analysts say medical testing services are particularly well-suited to rationalization due to major cost saving opportunities, and Symbion is seen as the last major consolidation opportunity, explaining the fierce battle for its assets.
Under "Plan B", Healthscope would buy Symbion's medical testing, diagnostic imaging and medical centers business, then in a separate transaction private equity firms Archer Capital and Ironbridge Capital, which partnered Healthscope in its original bid, would buy Symbion's consumer and pharmacy assets.
The new plan lowers the level of shareholder acceptance needed to approve the first stage of the deal from 75 percent to 50 percent, making it more difficult for Primary to block. The second stage of the deal is still subject to 75 percent shareholder acceptance.
"Primary's 20 percent shareholding in Symbion Health is unlikely to be sufficient to block the diagnostics proposal," Symbion Chairman Paul McClintock said in a statement.
The first stage could still go ahead if Primary succeeds in blocking the second. The whole plan is also subject to favorable tax rulings.