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Symbion Shareholders Reject Healthscope Deal

Shareholders in Australian healthcare company Symbion Health narrowly rejected a A$2.9 billion (US$2.4 billion) offer from Healthscope on Tuesday.

The fate of the deal had been in the balance after Primary Health Care, Symbion's top shareholder with a 20% stake, indicated it planned to oppose the bid.

Symbion said it got 73.9% of the shares. It needed 75% for acceptance. It said it may seek other proposals, including an alternative transaction with Healthscope.

"Given the resounding support today from shareholders (other than Primary Health Care), we may consider other proposals that deliver a similar outcome for Symbion Health shareholders," Symbion Chairman Paul McClintock said in a statement.

Primary, which has built up its Symbion stake in recent weeks, said last week it might team up with private equity to bid for Symbion, and that no options had been ruled out. Healthscope last week said it had rejected a Primary proposal for some Symbion assets.

McClintock had told shareholders ahead of the vote that no superior proposal to the Healthscope bid had been received prior to the meeting. Symbion would continue as a stand-alone entity if the bid was rejected, he said.

A Primary representative had said ahead of Tuesday's meeting that Primary would vote its 20% stake against the deal. Symbion rejected a A$2.3 billion offer from Primary earlier this year,
saying it did not believe Primary's estimates of synergies from a deal were realistic or achievable.

Trading in the shares of Symbion and Healthscope was halted on Tuesday ahead of the vote, while shares in Primary were up 0.91% at A$12.16.

Symbion, the company that remained after Mayne Group spun off its drugs arm in 2005, runs a network of more than 80 medical testing laboratories across Australia. It also runs medical centers and offers diagnostic imaging, consumer and pharmacy services.

Primary's 20% Symbion stake, worth around A$550 million based on Monday's closing share price, is the most it can hold without having to make a takeover offer under Australian corporate law.