A Medical Device Daily

The bidding war between Australia’s Primary Health Care and Healthscope (Victoria) for Symbion Health (Melbourne, Australia) continues with a revised takeover bid from Primary.

Primary has launched a $2.65 billion bid for Symbion to buy the remainder of the shares in the company that it does not already own. Primary, Symbion’s major shareholder, is offering $4.10 a share in cash.

The company amassed a 20% stake in Symbion after its previous buyout bid was rejected in February. Including debt, the new offer values Symbion at $3.5 billion.

The new offer is subject to various conditions, including a minimum acceptance condition of 90%, Primary said.

Edmund Bateman, managing director of Primary, said the offer was “clearly superior” to Healthscope’s proposal.

Symbion shareholders rejected a A$2.9 billion ($2.4 billion) takeover bid led by Healthscope in September (Medical Device Daily, Sept. 13, 2007), extending a nine-month battle for more than 130 pathology laboratories and medical clinics in Australia.

Primary, Australia’s third-largest health company, voted against the A$4.49-a-share offer, blocking Healthscope from getting the three-quarters majority needed for approval, according to a Bloomberg report.

“Primary believes the all-cash offer is highly attractive for Symbion shareholders,” Bateman said. “Primary’s all-cash offer provides certainty of value for Symbion shareholders, as well as delivering an attractive premium to the top end of the independent expert’s value range for Symbion shares of $3.91 per share, which includes a premium for control.”

Primary’s offer contains a condition that Symbion shareholders do not approve the proposed sale of Symbion’s diagnostics assets to Healthscope.

Primary said the acquisition of Symbion would strengthen its position in the medical centers, pathology and diagnostic imaging businesses.

Primary said it would fund the offer with debt and equity and is planning a placement of shares and a renounceable rights offer, after its offer is declared unconditional.

Meanwhile, Healthscope is still hoping to buy Symbion’s pathology, diagnostic imaging and medical centers businesses in a scrip deal worth $1.6 billion and assume about $900 million of Symbion debt.

Private equity firms Ironbridge Capital and Archer Capital would take Symbion’s consumer and pharmacy services businesses for $1.15 billion in cash.

The Symbion and Healthscope boards have endorsed the deal, but Primary indicated it would vote against it.

The proposal is due to be considered by Symbion and Healthscope shareholders at separate meetings on Nov. 30.

In other dealmaking activity:

• Israeli camera-in-a-pill maker Given Imaging (Jerusalem) said that InScope, a business of Johnson & Johnson (New Brunswick, New Jersey) has ended its agreement to market Given’s PillCam in the U.S. The device is used to diagnose gastrointestinal disorders.

InScope, a division of Ethicon Endo-Surgery (Cincinnati), will pay Given $7.6 million in fees associated with the termination, the device maker said in a statement.

As a result, Given said it will record income of about $13.5 million in the 4Q07 and additional income of roughly $12.5 million during the first two quarters of 2008.

Ethicon cited a shift in its strategic priorities within gastroenterology and other areas as the reason for ending the relationship.

InScope said it will continue to support reimbursement activities for the PillCam and maintain its market development field force for up to six months. It also agreed to continue to fund ongoing clinical trials associated with esophageal diseases.

• Conventus Inter-Insurance Exchange (Woodbridge, New Jersey), a medical liability insurance company, reported an agreement with LMS Medical Systems (Montreal, Quebec), developer of the Calm clinical information system and risk management software for obstetrics, to license Calm Shoulder Screen. Calm Shoulder Screen is a program used to assess the risk of shoulder dystocia, a complication that occurs in thousands of deliveries in the U.S. each year, often causing significant injury to the newborn, according to the company. The condition occurs when the baby’s shoulder gets stuck behind the mother’s pubic bone during childbirth.

Conventus said it would provide its insured obstetricians with the LMS tool at no charge and give premium credits to those that implement the system in their practices.

The company said shoulder dystocia represents a common cause of payout in litigation against obstetricians in the U.S. and is viewed as unpredictable and unpreventable. Potential injuries include brachial plexus impairment, brain damage and sometimes death, with medical malpractice payouts ranging up to $2 million.

• Telemedicus (Houston) has agreed to buy My Healthy Access (Houston), which operates mini-medical clinics in Wal-Mart stores, providing care for non-life-threatening episodic conditions. The clinics were first installed into Wal-Mart stores in 2006.

Telemedicus said that the acquisition opens new markets for its Dreams technology which allows doctors to virtually see and direct treatment of patients through various monitoring devices and high-def video that transmits the patient’s data in real time.