Symbion bid for SDS Pathology

DIAGNOSTICS outfit Symbion Health, Australia's biggest healthcare company, has made an offer for Primary Health Care's SDS Pathology.

DIAGNOSTICS outfit Symbion Health, Australia's biggest healthcare company, has made an offer for Primary Health Care's SDS Pathology.

Ending days of market speculation, Primary Health revealed what is apparently behind its request for two trading halts, which the company first called for on Friday last week.

Primary, which owns and runs medical clinics, has a market value of $1.4 billion.

It told the Australian Stock Exchange yesterday that it would consider Symbion's bid for its pathology operations, but said the offer could yet amount to "nothing". Market analysts yesterday said a public auction could develop for Primary's assets.

"The proposal, like other proposals received from time to time by the company, will be considered by the company," Primary said. "Considering the proposal and any concurrent discussions may take some time."

Symbion spun out of Mayne Group's 2005 demerger, which saw the company split into separate diagnostic and pharmaceutical businesses.

Mayne Pharma, which focuses on oncology drugs, relocated to Britain this year.

Merrill Lynch analyst Michael Carmody, who predicted the offer last week, described a deal between Symbion and Primary as a "perfect marriage".

But he yesterday speculated that rivals Sonic Health and Symbion could make a bid for part, or all, of Primary.

"In our view, combining Primary and Symbion's pathology assets makes significant strategic and fiscal sense," Mr Carmody said. "However (as) the asset is unlikely to be inexpensive, in our view, Sonic Health Care and Healthscope are also potential bidders for the business," Mr Carmody said.

Shaw Stockbroking analyst Brent Mitchell said Primary could be looking to offload its pathology operations in return for medical centres from Symbion.

"It (pathology) is a minor part of their operations and I suspect that there might be - counter to that deal - some medical centres from Symbion go to Primary," Mr Mitchell said.

Primary posted a 26 per cent rise in net profit to $47.5 million for 2005-06 after sales revenue of $240.7 million.

Additional reporting: AAP