Australia's Primary says considering Symbion bid

SYDNEY (Reuters) - Australia's Primary Health Care Ltd (PRY.AX: Quote, Profile, Research, Stock Buzz) said on Monday it is considering a joint bid for healthcare firm Symbion Health Ltd SYB.AX, challenging an agreed A$2.9 billion ($2.4 billion) offer from rival Healthscope Ltd (HSP.AX: Quote, Profile, Research, Stock Buzz).

Primary, which has built up a 20 percent stake in Symbion, said it was in talks with private equity and was also considering other options.

"The discussions with private equity are incomplete and may or may not lead to a bid for Symbion," Primary said in a statement, responding to a newspaper report.

Symbion shares rose 2.4 percent to A$4.26 at 0016 GMT, valuing the company at A$2.8 billion. Primary shares rose 0.2 percent to A$10.95.

The Australian Financial Review newspaper said Monday that Primary was in advanced talks with private equity firm Pacific Equity Partners (PEP) over a A$3.5 billion offer.

Credit Suisse (CSGN.VX: Quote, Profile, Research, Stock Buzz) and National Australia Bank Ltd. (NAB.AX: Quote, Profile, Research, Stock Buzz) would fund the deal, the paper said.

A source familiar with the situation told Reuters it was highly likely PEP was involved. PEP bought New Zealand healthcare firm Guardian Healthcare in 2004 which it later sold for a profit.

Primary has been building up its stake in Symbion over the past month and now has 20 percent, the most it can hold without having to make a takeover offer under Australian corporate law. Symbion in January rejected a A$2.3 billion offer from Primary.

Under the existing deal, Healthscope will take Symbion's medical testing and health centre businesses, while its private equity partners Ironbridge Capital and Archer Capital will take the consumer healthcare products and pharmacy businesses.