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Healthcare services provider Independent Practitioner Network Ltd recommended to shareholders that they take no action in regard to an unsolicited takeover offer by Primary Healthcare Ltd.

"The board considers Primary's opportunistic offer does not adequately reflect the significant strategic value of IPN," IPN said in a letter to shareholders.

Primary, which operates medical centres and digital diagnostic imaging, earlier this month offered five cents for each IPN share.




IPN said it continued to execute strategic and operational initiatives, including the implementation of the Monet IT system which was expected to deliver cost efficiencies and improved operating performance.

IPN also said the federal government's Medicare Plus package introduced four months ago contained a number of favourable initiatives which were having a positive impact on IPN's revenue.

"While significant progress has been made, there is still much to be done to deliver the full benefits of these initiatives," IPN said.

"Primary is opportunistically making an inadequate offer to acquire your shares before these initiatives have been completed."

IPN said its enterprise value, based on Primary's five cents per share offer, was under $80 million compared to Primary's enterprise value of about $660 million.

"The IPN board considers this indicates the significant earnings and value upside available to IPN if it successfully achieves its strategic and operating initiatives, and also indicates the strategic value of your company to Primary," IPN said.

IPN said the Primary offer included no premium to the price of IPN's shares before the announcement of the takeover bid.

IPN shares were 0.1 cents higher at 5.2 cents in morning trade on Wednesday. Primary shares were two cents lower at $5.40.