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Symbion Says Primary Loses Legal Challenge Over Bid

Reuters
Friday, 23 Nov 2007 | 4:34 AM ET

Australia's Symbion Health said on Friday Primary Health Care had lost a legal challenge against it over Symbion's proposed A$2.8 billion (US$2.4 billion) tie-up with Healthscope.

Primary has launched a rival, hostile cash bid that values Symbion at A$2.7 billion, and the battle for lucrative assets in Australia's healthcare sector has turned ugly as Symbion and Primary trade barbs.

Symbion said in a statement that a court had dismissed Primary's challenges to the form of the resolution to be put to Symbion shareholders, to a break fee and to terms that limit the companies from talking to anyone else about a competing offer.

"We are pleased that another of Primary's disruptive tactics seeking to prevent Symbion Health shareholders as a whole from obtaining the benefits of the proposal has proven unsuccessful," Symbion Chairman Paul McClintock said in the statement.

Primary said in a separate brief statement that it is considering the court decision and its further options.

Primary used its position as Symbion's largest shareholder to block an initial takeover bid by Healthscope in September. When Healthscope and Symbion agreed on a revised cash and stock offer, Primary responded with a hostile bid of A$4.10 a share in cash.

In a separate statement on Friday, Symbion said it believed Primary's bid documents contained misleading information, and Symbion's lawyers had written to Primary.

The bidding war is the latest in a year-long battle for pathology and diagnostic imaging assets in Australia, coveted as Australians age and increasingly rely on private healthcare.

Trading in the shares of Healthscope and Symbion was halted on Friday. Symbion last closed at A$4.08, while Healthscope last traded at A$5.43.

Primary shares closed on Friday at A$12.28, up 0.24 percent in a broader market that fell 0.06 percent.

Healthscope plans to buy Symbion's pathology, diagnostic imaging and medical centres business for shares, and two private equity firms would buy Symbion's consumer and pharmacy businesses for around A$1.15 billion in cash.

Symbion has recommended the Healthscope offer.

Primary is bidding for the whole of Symbion, but has said it would then sell the consumer and pharmacy businesses.

The key to Healthscope's share-based offer going ahead is approval from the Australian Tax Office giving capital gains tax relief to Symbion shareholders.

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