* Healthscope selling to raise funds for other projects
* Competition concerns could be a hurdle
* Sonic shares up 1.6 pct in weaker market
MELBOURNE, May 16 (Reuters) - Sonic Healthcare Ltd, Australia’s top pathology and radiology group, has agreed to buy some pathology assets from private equity-owned Healthscope for A$100 million ($100 million), in what could be a test for the competition watchdog.
Sonic shares jumped 2 percent to a 10-month high of A$12.80 after the announcement on Wednesday and last traded at A$12.74, sharply outperforming a 1.3 percent fall in the broader market .
Sonic will buy Healthscope’s pathology businesses in four locations around Australia which have combined annual revenue of about A$105 million, the two companies said on Wednesday.
The deal is subject to approval from the Australian Competition and Consumer Commission, which could prove to be a hurdle, depending on its view on whether deregulation of blood collection centres has succeeded in spurring competition in the sector.
Last year Sonic Chief Executive Colin Goldschmidt said the move had actually favoured the two biggest players in the business, Sonic and Primary Health Care.
“It achieved the opposite effect and has benefited the bigger companies, not the smaller pathology players,” he was quoted saying in The Australian newspaper.
Hospital operator Healthscope, bought by private equity firms TPG Capital and Carlyle Group for A$2 billion in 2010, said it was looking to sell its weaker units to focus on other parts of its Australian and offshore businesses.
“In view of our capital projects pipeline and growth prospects in other areas of Healthscope’s business, Healthscope has decided to sell its pathology business in Queensland, New South Wales, Australian Capital Territory and Western Australia,” Managing Director Robert Cooke said in a statement.