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Australian firm Primary Health Care says it is proposing a "merger of equals" to larger pathology firm Symbion Health, the sector's latest consolidation move.
Alongside news of a 20 per cent rise in first-half profits, Primary gave details yesterday of its proposal, which Symbion rebuffed last week as underpriced.
Primary said it was offering one Primary share for every four Symbion shares, or A$3.50 in cash for each Symbion share, valuing Symbion at about A$2.3 billion ($2.6 billion) - below Symbion's market value at Monday's closing price.
Symbion shares dropped almost 3 per cent to A$3.97, while Primary was trading down 1 per cent at A$13.70.
"While Primary does have alternative growth strategies which it continues to follow, the scale of the synergies and the present opportunity are compelling for both sets of shareholders," the company said.
The merged company would be led by the current Primary team, and synergies ranged from A$40 million to possibly more than A$100 million, it said. Analysts estimate cost savings of A$30 million to A$40 million a year.
- REUTERS
