LINKS CORPORATE MEDICINE WEB SITE Disclaimer The many extracts on these pages are from copyright material. They are owned by the reference given or its owner. They are reproduced here for educational purposes and to stimulate public debate about the provision of health and aged care. I consider this to be "fair use" in the common interest. They should not be reproduced for commercial purposes. The material is selective and I have not included denials and explanations. I am not claiming that all of the allegations are true. The intention is to show the general thrust of corporate practices as well as the nature and extent of any allegations made. Links to Site Maps Central Initial USA Australian International Corporate Practices (to print) Path to this page Home Australia Austr Hosp Companies Mayne access page Other pages Entry to Privatisation Privatisation Background Australian states Gen. Pract. Corporatisation General Practice/Pathology:- Sonic&Co . . Foundation Lifecare . . . Endeavour Primary . . Revesco&related Hospital Companies Affinity Health Alpha Healthcare Austr. Hosp. Care Benchmark Healthscope Hosps of Austr (HOA) Insurer hospitals James Hardie & HCC McGoldrick's comps Markalinga & AME Mayne Health & HCoA Moran Healthcare Nova Health Ramsay Hlth Care US grps HCA & AMI Small Hosp groups Mayne Pages Mayne access page 1886-1994 - - - refs Collusion - - - refs 1995-2000 - - - refs Clippings 1998 Conflicts&Scan scam                         refs Privatisations 2000-2001 - - - refs Smedley - - refs Health Story 2002-2003 Purchasers Affinity Hlth & Citigroup 2004-2005 Break up Mayne Diagnostics Restrict Mayne Content References and extracts Australian section      References  Mayne Nickless The Smedley years June 2000 to Dec 2001

Ramsay Health Care
Shares Magazine 07/01/2000

Parts of the health care industry in Australia couldn't exactly be described as being in good health themselves, from the Government's involvement through to private enterprise. The industry seems to be burdened by complexities of Government control and powerful vested interests.

Mayne Nickless acquires corporate health group (update)
AAP News 07/04/2000

Mayne Nickless' diagnostic services arm has acquired corporate health services group, Corporate Wellness Solutions (CWS) as part of the company's strategy to grow the division.
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Mayne said CWS had an extensive list of bluechip corporate clients and recently won major tenders to provide health evaluation services for leading corporate groups.

CWS' services include annual medical checks, pre-employment examinations, health advisory services, as well as testing and health support for staff.

It also had strategic relationships with leading international health management groups including the US-based Mayo Clinic Healthquest and Harris Healthtrends, the University of Sydney, Deakin University in Melbourne, and VicHealth.
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MNDS chief executive Shane Tanner said the acquisition of CWS would lead to new for Mayne, as corporate health services and wellness products were a growing area.

Mayne Nickless says acquires corporate health services group
AAP News 07/04/2000

CWS' services include annual medical checks, pre-employment examinations, health advisory services, as well as testing and health support for staff. It has operated for over 10 years and is considered a leader in the field.
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, of Mayne Nickless Diagnostic Services, said that the acquisition of CWS would open new opportunities to Mayne Nickless Diagnostic Services.

"Corporate health services and wellness products is a growing area," he (Shane Tanner, Chief Executive Officer) said.

"Significantly for future growth, CWS has a respected and established name and long standing relationships with major corporate clients. It greatly complements a number of pathology and diagnostic imaging wellness initiatives which MNDS is currently involved in."

New Surgeon's Mayne Task
Australian Financial Review 07/08/2000

As good as Smedley, with his crash-through-or-crash management style, is at turning around moribund organisations, delivering Colonial-sized windfalls to Mayne Nickless shareholders will prove harder than most appreciate.

The poor odds stem from the fact that the Australian health-care industry, where the majority of Mayne Nickless's assets are concentrated, looks odious when compared with the pot of gold that is the funds management industry.
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Smedley's Colonial strategy was simple: buy at least one competitor every six months and chop the tripes out of the merged company's costs.

As a strategy, it was beautiful in its simplicity. But it could not have worked without the fact that the industry money flow was growing at double-digit rates and the people paying for the services - the pensioners of tomorrow -have not yet objected to fund managers earning 50 per cent profit margins.

At Mayne Nickless, the industry landscape could not be more different. Mayne Nickless has nearly $1.1 billion, or 85 per cent of its market capitalisation, tied up in private hospitals, on which it earned a pre-tax return last year of less than 6 per cent.
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But a typical private hospital has just five or six customers that count -State and federal government instrumentalities, and the big five health insurance funds - who are committed to paying less for more.

And due to an excess of private hospital beds, those big and powerful customers can switch between suppliers on a whim. Unlike funds management, where a strong brand name and customer loyalty can produce fat margins, private hospitals are a commodity business, with margins to match.
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At any single hospital the top five clients will often account for 70-80 per cent of revenue.

Way back in 1992, when Mayne Nickless had just acquired its hospitals businesses, the profit margin on sales was 20 per cent. Last year Mayne Nickless's hospitals business returned a margin on sales of less than 8 per cent.
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Most of the fall in private hospital margins can be blamed on the combination of excessive optimism and bad management. It is in the latter area that a person like Smedley can, and will, make a difference.
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One of the biggest problem areas of the private hospital investment boom is so-called co-located hospitals. A co-located hospital is a private hospital built within the campus of an established public hospital.
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However, in the rush to build co-located hospitals, all the major operators paid insufficient attention to the high capital costs and the difficulty of negotiating contracts with health funds.
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Most private hospital operators underestimated how much they needed to charge to recoup the technology costs. Many have found themselves suffering big losses on co-located hospitals.
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In terms of the private hospital learning curve, Smedley could not have timed his arrival at Mayne Nickless better. The private hospital profit tide, which has been ebbing for two years, is about to flow again.
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- - - - - - for the first time in a decade, Mayne Nickless knows how much it costs to perform a specific procedure, which should lead to fewer loss-making contracts.
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Thanks to those developments, Mayne Nickless's hospital business is on the brink of a two to three-year profit recovery.
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All this should mean that Smedley, without lifting a finger, will preside over a creditable earnings turnaround at Mayne Nickless health care.
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His predecessor, Bob Dalziel, is given little credit by the market. But the favourable results Smedley delivers will owe a good deal to Dalziel's spade work.

While squeezing more profit out of private hospitals should be Smedley's top priority at Mayne Nickless, - - - - - -
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With logistics becoming a highly specialised, global industry, with multinational clients demanding all-in-one solutions, Mayne Nickless needs to get dramatically bigger or get out. The latter route looks more likely.

With Mayne Nickless's transport and logistics business apparently near the end of the road, the company's future looks decidedly medical.

Mayne's New Man Has Got His Orders
Business Review Weekly 07/14/2000

- - - - - one thing is certain about Mayne Nickless: the diversified logistics and health-care company will have to be broken up and most of the pieces sold, closed, floated or overhauled.

Two months ago, the Mayne Nickless board ratified a plan to break up and redirect the business. The plan includes the sale of its British express courier business, its remaining "time critical" business overseas - Loomis Courier Service in Canada - and its local ports operations; joint-venture deals for its Asian logistics business; and the creation of a new entity that will offer an alternative funding mechanism to the health insurance funds.
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The plan was delivered to the board by managing director Bob Dalziel in May. - - - - This means the group would have to grow through acquisitions. With each division hungry for capital, one of them would have to go.

A key part of Dalziel's strategy was to separate the company into two distinctive parts, health and logistics, and create a new division called e-health, to be headed by Peter Hourihan, who was Mayne's chief information officer. The plan called for Mayne Nickless to then sell logistics and use the funds to expand the health business.

However, the board believed that the company's metamorphosis needed to be directed by a new leader. That leader, Peter Smedley, who replaces Dalziel on August 1, is believed to have agreed to the sweeping changes before he took the job.
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He says another problem with Mayne Nickless is low morale: "There have been so many changes and restructurings and sales over the years that nobody feels safe or confident. There are a lot of bully-boy tactics adopted, and in the health division there is a total lack of management depth. Most of the people running health have no experience; they come from logistics, the tobacco sector or anywhere else but health. That is a real problem because the health sector is very complex and complicated, and you need to know all the nuances of it."
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With the benefit of hindsight, Mayne Nickless should have turned itself into a telecommunications company in 1991 when it invested in Australia's second telecommunications carrier licence. Instead, it opted for health and transport, two difficult industries. The health industry is in dire straits

in Australia, with margins falling from 20% in 1992 to less than 8% today. Transport is also a tough sector; the logistics industry's average margin has fallen from 7% in 1992 to 5.2% today.
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The changes Smedley is expected to preside over include the sale, by September, of Parceline and Interlink in Britain for up to $450 million; the sale of the Canadian-based Loomis business for up to $150 million; the divestment of the ports business in Australia for $50 million; and a strategic alliance with a large European logistics business to cover Mayne Nickless logistics in Australia and Asia.
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The next step is the eventual spin-off or sale of the entire logistics business. It is believed that if Dalziel had renewed his contract, he would have sold the logistics business by early next year. Smedley is renowned for doing things quickly, so a sale may happen earlier.
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The notable absence of the group's diagnostics services division in the new health structure suggests that the board is still deciding what to do with it. It is believed that the chief executive of the division, Shane Tanner, has been a strong advocate of floating it as a separately listed business.
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For months, industry observers have speculated that if Mayne Nickless wants to be a vertically integrated health service provider, it should buy a health fund. Bill Kirk, the new managing director of the health division, confirms that the company has looked at buying a health fund or buying a stake in a series of health funds. He also confirms that there is work going on to create a new financial model that could offer an alternative to the health funds. This would be a new company, backed possibly by banks, which would expand their financial services operations into health insurance.
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the market does not view Mayne Nickless as a good bet, given the performance of its share price over the past five years and the more than $550 million in abnormal write-offs it has made in the past seven years. A thousand dollars invested in Mayne Nickless in July 1997 is now worth about $598.
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Smedley and the board have six months in which to fix Mayne Nickless. With the potential sale of assets valued at more than $800 million, a mooted float of the diagnostics business and a push into e-commerce, Smedley might be able to ensure the company's survival. A recent PricewaterhouseCoopers report says that if the hospital industry can be turned into an integrated trading community of suppliers, distributors and hospitals by 2002, it will save $235 million a year. Mayne is leading the push to achieve these changes.

Pacman's Diagnosis Sorely Needed
Australian Financial Review 07/19/2000

That aside, Hudson argues that many of ``the challenges faced by Mayne's businesses are structural rather than operational and therefore the upside is not as significant as the market is starting to believe''.

She's sat down and done the numbers.
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The accompanying graphic details this analysis and it's the hospitals that are the ugliest.
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Hudson says its radiology assets are overpriced by the market, possibly due to the recent float of Medical Imaging Australasia. She didn't say it, but insiders say Mayne Nicklesss has been badly affected by the MRI scandal.

P&O Offer On Ports Disappoints Mayne
Australian Financial Review 07/25/2000

Mayne Nickless Ltd is reconsidering options for its $50 million-plus Australian ports business after failing to reach agreement on price in negotiations to sell the assets to P&O.
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However, it is understood negotiations broke down because P&O was prepared to offer only about $30 million for the business, about half the price sought by Mayne Nickless.

Battle For Medi-money Hots Up
Australian Financial Review 08/08/2000

The battle between cash-rich private health insurers and profit-poor private hospital operators moved into outright war yesterday when Australian Hospital Care threatened to boycott MBF-funded patients at its Gold Coast hospitals.

What may appear to be a minor skirmish amid contract negotiations brings into the open the looming battle as the private hospital companies attempt to grab some of the $1 billion in new premium income going to the health funds this year.
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The hospital owners, of course, have themselves to blame for what has been a poorly conceived investment binge in recent years and now they are crying poor.

Their problem is that the funds own the customers.
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The reason is its freeze on payments since 1997 and while MBF claims to have offered an increase this year, it was clearly not enough for Dr Stanford who went on to note in his ASX statement that the fund, with an 18 per cent national market share, accounted for 25 per cent of complaints to the Health Insurance Ombudsman.
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Health funds own the customers and the hospital owners are commodity suppliers who are forced to increase spending to keep their doctor base but are reliant on the funds to pay for their services.

This structural imbalance explains why many tip Mayne Nickless to buy its favourite health fund, Axa Health, or even Medibank Private to move the rationalisation process forward.
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The fight is an issue for the Government also because, after its policies have poured billions into the funds, the end game should be a better health system, not rich insurance funds.

GPs Inc - Profits Or Patients
Sydney Morning Herald 08/10/2000

As more and more doctors trade private practice for a company pay cheque, Gerard Ryle looks at just where their loyalties lie.
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Others include the Mayne Nickless corporation which through its subsidiary Health Care of Australia owns four medical centres in Sydney.
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Douglass is referring to what is known as vertical integration, which involves bringing general practice and diagnostic tests under the one roof.

He says it is the economies created by this concentration of services under a single banner that have attracted institutional investors, which in turn, has allowed medical centre operators to offer large sums to doctors willing to move their family practices and work in the larger centres.
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``By the time the public wakes up to what has happened, it is going to be all over. There is not going to be a local independent GP.''

MAYNE NICKLESS LIMITED: Director Appointment/Resignation
Australian Stock Exchange Company Announcements 08/29/2000

Mr Geoff Tomlinson has resigned from the Board of Mayne Nickless effective from 29 August, 2000. - - -results from a growing conflict of interest arising from the activities of Medweb Limited and the health care operations of Mayne Nickless Limited. He has a strong commitment to Medweb through his roles as a founding shareholder and Chairman of that company.

Doctors On Call To Go Corporate
Australian Financial Review 08/30/2000

Consolidation in the health services industry is frenetic, with listed companies staging a battle royal to attract private practices into their folds as the sector rapidly becomes corporatised.

Sonic Healthcare, Mayne Nickless, Primary Healthcare and Medical Imaging Australasia are all in the trenches, using scrip to convince GPs, pathologists and radiologists that a brighter future resides on the sharemarket.

It's an intense process, not to mention one which some see as risking the quality of service provided to patients.

Shake-up For Mayne Nickless
Australian Financial Review 08/30/2000  

New Mayne Nickless managing director Mr Peter Smedley is expected to announce asset writedowns and cost-cutting initiatives when he reports the group's results today.

Analysts tip writedowns of more than $100 million, particularly in the group's struggling $1 billion hospital portfolio.
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While cost-cutting is expected to be a key priority for Mr Smedley, the market will also look for signals as to his strategy to revive the struggling conglomerate.

MAYNE NICKLESS LIMITED: Preliminary Final Report
Australian Stock Exchange Company Announcements 08/30/2000

MAYNE NICKLESS PROFIT RESULT

Mayne Nickless Limited today announced a net profit after tax and before abnormals for the year to 2 July 2000 of $75.4 million, a 31% reduction on the 1999 result of $109.9 million. After abnormal charges of $249.5 million, which were largely due to asset writedowns, the Company reported a net loss of $174.1 million.
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The Managing Director and Chief Executive Officer, Mr Peter Smedley, who joined the group on 19 July 2000, said despite an improvement in the underlying earnings for the group, the overall result was unacceptable. It highlighted the imperative to address the company's cost base and pursue strategic cohesion.
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Mr Smedley said the underlying contribution from the health care assets was pleasing. "The health care result and the fact that the private health care environment is improving in Australia provides a strong basis for future growth."
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The group's hospital division, Health Care of Australia, reported strong revenue growth of 15% to $879.6 million. Reported earnings were $54.2 million, which is 8% below the 1999 result and reflects the impact of the weak first half. Underlying earnings, however, showed improvements and were ahead of the prior year. HCoA also improved its underlying margins.

MAYNE NICKLESS DIAGNOSTIC SERVICES

The diagnostic services business achieved 38% revenue growth to $358.4 million as a result of a series of diagnostic acquisitions, as well as organic growth. Diagnostic imaging accounted for 35% of the total revenues, up from 15% last year.

Earnings before interest and tax was up 18% to $33.8 million although returns continued to be impacted by the unsatisfactory performance of its New South Wales pathology business.

The diagnostic business continued to grow during the year with several significant acquisitions:
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The growth in health insurance fund membership to 41.2% of the population will reduce pressure on the private health funds.

Mayne Nickless remains the largest and most profitable private hospital group in the country and expects to be better able to leverage its hospital network.

Here's To The Long, Hard Haul
Australian Financial Review 08/31/2000  

Yesterday's earnings crash at Mayne Nickless underscored the extent of the disarray at the healthcare and logistics conglomerate.

But the situation won't daunt chief executive Mr Peter Smedley, who has quickly moved to clean the slate and bring on board four former Colonial executives to help him turn the group around.

Taking a massive $249.5 million in abnormal charges in his first few weeks in the job, Mr Smedley has also vowed to sweep a broom through Mayne Nick's cost base.

He promised the ``clearly articulated group strategy'' which the market has long demanded, but investors may have to wait until October when a proposal being worked on by 20 executives is expected to be presented to the board.
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The group was also rumoured to be working on plans to provide an alternative funding mechanism to health insurance funds through a new separate entity, and the creation of a new e-commerce health arm.
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Mayne Nick faces massive structural hurdles to improved performance, but at a minimum Mr Smedley has signalled some sweeping internal changes which should eventually be reflected in the numbers.

Red Ink Flows As Smedley Wields Knife
Australian Financial Review 08/31/2000

Mr Smedley also foreshadowed a cost-cutting program ahead of unveiling a new strategic direction later this year.

``Today's result was clearly unacceptable,'' he said after revealing a $174.07 million loss, a 136 per cent turnaround on last year's profit.

The abnormal losses related mainly to the write down of assets and brand names, with analysts saying more writedowns were prevented by a lack of retained profits.
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Mr Smedley said he hoped to release a detailed strategy for the group ``within a month or so'' and said the review would include a rethink of capital planning and the group's target of a 75 per cent dividend payout ratio.

A 20-member team is working on the project, which is expected to determine whether the company has a long-term future in both logistics and health care.
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Mr Smedley said his priority this year would be to cut costs to make the group's solid revenue gains flow to the bottom line, in contrast to last year when a 16 per cent cost increase in its continuing businesses negated double-digit revenue growth.

Smedley Focussed As Mayne Nickless Sees Red
The Age 08/31/2000

Announcing the results as unacceptable, Mayne's new managing director said the net post-abnormals loss of $174.1 million showed why the company had to address an expanding cost base that had prevented it from translating strong revenues into improved profits.
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Mr Smedley unveiled a shake-up and a strategic review of the conglomerate, which he said would result in cost reductions, business improvements and a more cohesive strategic approach.
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Several cost-saving intiatives will be rolled out in the first half of this financial year, but these will not have any immediate impact because of the timing and will be more significant in the second half of the year.

On the question of potential acquisitions or divestments, Mr Smedley said his initial focus was on extracting maximum value out of the existing businesses.

Smedley takes axe to Mayne pain
The Australian 08/31/2000
Abstract - Australasian Business Intelligence:

Smedley Targets Costs As Mayne Plunges Into Red

The Age 08/31/2000

 Mr Smedley unveiled a shake-up and a strategic review of the company, which he said would result in cost reductions, business improvements and a more cohesive strategic approach.

``This group has been operating in the past as at least seven separate companies,'' he said. ``The philosophy that is going to underpin the group going forward is it's run as one company.''

Mayne Vows To Cut Costs
Newcastle Herald 08/31/2000

Mayne Nick Execs Quit
Australian Financial Review 09/05/2000

Mayne Nickless chief executive Mr Peter Smedley has continued the shake-up of senior management, with three of the health-care and logistics company's most senior operational heads departing as part of a new divisional structure.
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Mayne Nickless Diagnostics chief executive Mr Shane Tanner, who was the company's former chief financial officer for five years, MPG Logistics chief executive Mr Robert Atkins and Mayne Nickless Express chief executive Mr Jean-Francois Boyer, have all left the company.
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A seven strong executive team now sits above the operational heads four are ex-Colonial staff. Mr James, who came to Mayne Nickless with Mr Smedley from Colonial, is expected to drive the company's restructuring.

Mayne's Bonuses After Loss
Australian Financial Review 09/15/2000

Mayne Nickless's top tier of management received performance bonuses totalling more than $350,000 last financial year despite the company reporting a $174 million net loss and its shares hitting a 13-year low.

The extent of the management clean-out at Mayne Nickless became apparent with the release of the group's annual report yesterday, which revealed that all but one of its six highest-paid managers last year have now left.

The only remaining officer, former chief operating officer Mr Bill Kirk is to leave at the year's end.
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The man Mr Smedley replaced, Mr Bob Dalziel received a $125,000 ``performance-based bonus'' despite departing six months ahead of the end of his contract. In addition to his $1.2 million total remuneration last year, Mr Dalziel received termination and accrued leave payments of more than $1.2 million.
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Former head of Mayne's health-care arm Dr Barry Catchlove, who left in March, received a performance bonus of $62,500 as part of total remuneration of more than $1.8 million.
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At the company's November 14 AGM, shareholders will be asked to approve the issue of 2 million shares to Mr Smedley, financed by an interest free loan.

Ailing Mayne pays big bonus
The Australian 09/15/2000

Abstract:- Australasian Business Intelligence:
A company report shows Dalziel was paid $A2.42 million in the 13 months to 31 July 2000, including a $A1.22 million termination package. Dalziel led Mayne for four and a half years, during which time the group's share price slumped from $A6.60 to $A2.90, representing the loss of about $A1.28 billion in market capitalisation.

An ill wind blowing
The Bulletin 09/19/2000

Abstract:-- Australasian Business Intelligence:
Australian hospital companies continue to struggle in the second half of 2000. - - - Mayne Nickless is in the red again and is attempting to cut costs. Ramsay has written off $A2.9m but had a net profit of 11 per cent. Australian Hospital Care is in even worse condition.

Private Health Cover, But No Beds Certain
Sun Herald 09/24/2000

Despite high occupancy levels and a shortage of private beds in some areas, many private hospitals are struggling to make money.

The surge of millions of people into private insurance in the past few months is expected to make the situation worse, not better.

In NSW, at least five private hospitals have recently gone into receivership including NSW Private (formerly the Masonic), Bigge Street Private in Liverpool and Metropolitan Rehabilitation in Petersham.
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The Australian Doctors' Fund yesterday blamed the problems on the Federal Government's policy of managed competition in health care, which was introduced in 1995 by Health Minister Carmen Lawrence.

``You have private hospitals at record occupancy levels, but you have record low profitability,'' he said.

Mayne review claims victim
The Australian 09/26/2000

Abstract:-- Australasian Business Intelligence:
Mayne Nickless Limited's management shake-up has resulted in the departure of its chief financial officer, Steve Somogyi. - - - - -Many roles at individual hospitals have been abolished and centralised. Around 40 executives are believed to have been made redundant, - - -

Corporate Medicine
Business Review Weekly 09/29/2000

CONTRACTS THAT BRING GENERAL PRACTITIONERS UNDER A CORPORATE UMBRELLA HAVE POLARISED THE HEALTH SECTOR
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Entrepreneurial doctors, beginning with Geoffrey Edelsten in the early 1980s, have exploited general practice as a lucrative business. More recently, the Health Care of Australia division of Mayne Nickless has provided a corporate link between pathology, radiology and general practice. And whole sections of medicine -such as pathology - are already dominated by publicly listed companies.
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A different view was recently expressed by accounting firm KPMG, in a report called Corporatisation of General Practice, conducted for the Department of Health and Aged Care and presented at an Australian Medical Association conference in June. (The report is interesting because the head of KPMG's health consulting division, and a contributor to the report, Dr Barry Catchlove, was previously head of the HCA division of Mayne Nickless. HCA runs several medical centres, as well as pathology and radiology operations.)
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If a doctor's referrals can be controlled - or directed - a large slice of that specialist market can also be tied in. If a medical centre has, for example, 10 full-time general practitioners, each generating $200,000 of Medicare income a year, they are also generating on average $3.2 million a year in downstream specialist billings. If a substantial part of that is picked up by businesses or specialists who work in the same corporate group, it is a good income stream.

Mayne's Shares Surge To High On Speculation Over UK Sale
Australian Financial Review 10/04/2000

 Analysts speculated yesterday that Mayne's could reap more than $300million from the sale of its time-critical express businesses, Parceline and Interlink Express, in Britain.
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Since taking the helm in July, Mr Smedley has overseen the departure of many of the company's former management team and promised to reduce costs by consolidating the company's six business units.

Mr Smedley is expected to continue Mayne's expansion into radiology and pathology.

The company is yet to comment on the future of its small Malaysian, Chinese and Thai logistics operations, which, if the British and Canadian operations are sold, would be Mayne's only remaining offshore businesses.

Macquarie Bank has also raised the possibility that the company will emulate smaller rivals, such as Sonic Healthcare and Revesco Ltd, which have moved closer to GPs and specialists by buying medical clinics.

The corporate owners of such clinics hope GPs and specialists will favour them as provider of high value-added healthcare services.
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A 20-strong team is working on the review under chief financial officer Mr Peter Jenkins and chief operating officer Mr Stuart James 

Curing pain in Mayne
The Australian 10/08/2000

Abstract:-- Australasian Business Intelligence
- - - in June 2000, Mayne stock was trading as low as $A2.90. In first week of October 2000, Mayne stock hit a year high of $A4.49, representing a 45 per cent increase in the company's share value since Smedley was appointed. However, analysts now suggest the stock is at the top of its range and is expensive.

Parceline sale talk denied
Lloyd's List Daily Commercial News 10/09/2000

Abstract:-- Australasian Business Intelligence:
- - - A report in the "Australian Financial Review"- - - - has been denied by Mayne Nickless.

Mayne Fights $28m Claim By UK Trucker
Australian Financial Review 10/23/2000

Mayne Nickless is fighting a $28 million claim by an English trucking company for breach of contract by its Interlink parcel service subsidiary in the United Kingdom.

Night Trunkers' managing director, Mr Michael Parker, said that Interlink had illegally ended a long-term services agreement in October last year.
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Mayne Nickless is understood to be selling its UK logistics businesses, Interlink and Parceline, which could raise more than $400 million. The French Post Office, and possibly KPN, are considered to be potential buyers.
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Meanwhile, brokers have been promoting the stock on indications that Mr Smedley has accelerated cost-cutting and job shedding across the group.

Revesco Rules Out Gribble As Mayne Hovers
The West Australian 10/28/2000

REVESCO has ruled out buying the other half of Gribble Pathology Group in the near future as speculation continues the Perth-based health industry investor will become part of a Mayne Nickless-led corporate play.
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Speculation is focused on either a takeover of Revesco or Mayne Nickless spinning its pathology assets into the Perth company.

Revesco executive chairman Ian Trahar told shareholders at the company's annual meeting yesterday that buying the outstanding 50.1 per cent of Gribble, one of Australia's biggest pathology operators, was not on the cards.

Deutsche Upgrades Outlook For Mayne Shares
Sydney Morning Herald 10/30/2000

Predictions of a significant turnaround in the fortunes of the private health industry, coupled with managing director Mr Peter Smedley's political connections and management skills, were the driving forces behind a dramatic investment upgrade on Mayne Nickless by Deutsche Bank. - - - - - said previous key concerns that private hospitals were suffering from excess capacity were no longer an issue.

This followed the latest industry analysis showing a 45 per cent increase in the ownership of private health insurance and 14 per cent increase in admissions per annum.

``Hospital construction has ceased and some private hospitals are in receivership,'' Ms Allen said.
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``Through the acquisitions of Trust Bank in Tasmania and State of NSW while at Colonial, Smedley has developed excellent government relationships at both State and federal level,'' the analyst said.

Such political connections, she argued, should not be underestimated in an industry where ``the Government is both competitor and customer''.
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``This means becoming the lowest cost, quality operator and leveraging [or creating] a dominant market position across all its industries.''

Market Punts On Smedley Magic
Australian Financial Review 10/31/2000

Peter Smedley is still at least three weeks away from laying down his blueprint for Mayne Nickless, yet the 57 per cent increase in the company's stock price since his appointment has already delivered him a $4.4 million paper profit on his 2 million options. - - - - the value of the company has since risen by some $654 million.

To put this in context, it represents a massive 63 per cent of the company's entire value when it hit a recent low of $2.92 a share on March 9 when all hope of rumoured takeovers disappeared.

The issue now for a stock that, extraordinarily, is trading at a premium to the market (at 19 times this year's expected profit of 27cents a share) is, of course, whether the faith is justified.
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But the theory says that if Smedley can direct the 2.8 million new fee-paying fund members into his hospitals by attracting better doctors into better hospitals and ramp up margins in his diagnostic and pathology businesses, the faith is justified.
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To be fair, Smedley has shown some form by cleaning out a raft of senior managers.

Health Stocks In Fine Fettle
Sydney Morning Herald 10/31/2000

The ascent of Mayne Nickless above $5 has grabbed most attention in the healthcare sector, but others are also on the move.

Australian Hospital Care and Healthscope have both bettered the 38 per cent gain in Mayne over the past three months, while Ramsay and Sonic Healthcare haven't done that badly either.

MAYNE NICKLESS LIMITED: Other (Part A : Section 01 Of 01)
Australian Stock Exchange Company Announcements 11/01/2000

Mayne Nickless Limited today announced that it had sold its time critical express operation in the UK and Ireland, which includes Parceline and Interlink Express, - - - for A$535 million - - .
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"In this context, our business in the UK and Ireland would have lacked the operational scale and European presence going forward to ensure continued growth opportunities.

Pacman begins Mayne purge.
The Australian 11/01/2000

Abstract:-- Australasian Business Intelligence:
Recently appointed Mayne Nickless chief, Peter Smedley, has sold the company's European express freight business.

Mayne Sells Logistics For A Sterling Price
Australian Financial Review 11/02/2000

The sale of Parceline and Interlink Express businesses to a La Poste subsidiary ends the company's plan to conquer the European logistics market, conceived in the 1980s by former chief executive Mr Ian Webber.
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Macquarie Bank has raised the possibility that the company will emulate smaller rivals, such as Sonic Healthcare and Revesco Ltd, by entering corporate arrangements that encourage GPs and specialists to favour them as a provider of high value-added health-care services.

Dalziel's Team The Prime Movers In A Valuable Deal
Australian Financial Review 11/02/2000

- - - was largely the work of former managing director Bob Dalziel and his former management team.
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Fund managers were broadly supportive of the strategy implied by yesterday's announcement of a renewed focus on extracting higher earnings from the company's health-care operations and taking less from a pool of logistics assets spread across three continents.

Smedley Cashes Up In Europe, Now For The Mayne Game
The Age 11/02/2000

- the sale will leave Mayne with minimal debt levels. He also must decide what he will do with the remaining, uneasy mix of businesses and what he will do about growth at both the top and bottom-line levels.
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He (Smedley) said yesterday that the exit from Europe would enable Mayne to focus on pursuing growth in its logistics markets in Australia, Asia and Canada. He has said previously that it was imperative for the group to address its cost base and pursue strategic cohesion.

Smedley appears to be indicating that he will hang on to the logistics business (although Canada looks the odd element of the portfolio) despite the lack of obvious logic or synergies in healthcare and logistics.
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With his former right-hand man at Colonial, Stuart James, over-seeing the slash-and-burn exercise - there has been a wholesale purging of Mayne's senior ranks - and James' record of cost-cutting, Smedley will be able to focus increasingly on strategic issues.

The more complicated of those relate to healthcare, - - - . That's partly because of its own failings - too rapid expansion, an unbalanced portfolio of hospitals, lack of focus on costs, poor co-ordination and integration between its hospital and diagnostics divisions - but is also driven by the external settings.
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The benefits of that investment, however, haven't filtered through from the funds to the hospitals, who are price-takers under the current industry set-up. Mayne needs to find a way of gaining greater leverage over the funds, with some speculation that it may even buy its own fund.

That would be brave - it would be competing with its own customers - - - - .
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Greater efficiency through a more urgent and ruthless approach to managing its healthcare portfolio, of course, would create better earnings and financial flexibility.

Mayne Has Help From Low Dollar In UK Sale
The Age 11/02/2000

Flying In A Different Direction
Sydney Morning Herald 11/02/2000

Air New Zealand's hopes have taken a tumble, but Mayne Nickless is doing somersaults of delight.
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A year ago it was hard to excite any interest in ailing transport/logistics and health-care group Mayne Nickless. With a new chief executive, some good news coming out of the private hospitals division and only a few weeks away from a major policy statement on the future direction of the group, the investment community is agog.
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The new chief executive, Peter Smedley, who is renowned for his voracious appetite for new companies, now has some firepower.
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- - - - the rest of his strategy has been the subject of guessing games among the brokers. - - - - Clearly he has been keeping a fairly low profile.
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None of the divisions has been making respectable returns and not even Smedley can do much about it.

There is another school of thought and one which has been gaining a lot of currency in recent weeks that the private hospitals business is on the cusp of a major recovery.
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The trouble for private hospitals is that their client base is the large medical funds which have controlled pricing and therefore profits for the hospital operators.

A highly capital intensive business with no pricing power is just about the worst business cocktail imaginable.
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And this is why the betting from the analysts' community is on Smedley attempting to build a much larger business in hospitals and wrest pricing control away from the funds and into his hands.
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He will need to buy up big in order to counter what is likely to be parallel rationalisation in health funds a move which is currently being pushed by the Government.

In terms of what this means for the remaining transport and logistics businesses in Mayne Nickless, it is a fair bet that the remaining offshore operations in Asia will be sold.

Smedley Eyes A Mayne Injection
Australian Financial Review 11/10/2000

New statistics released yesterday reveal private health insurance participation has climbed to 45.8 per cent of the population, so it's not surprising that investors are focused on listed hospital operators.
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Smedley is rumoured to be eyeing Healthscope and/or Australian Health Care. But many sector observers reckon those punters have jumped the gun.

Mayne Nickless Keeps Asian Plans Under Wraps
Australian Financial Review 11/14/2000

Mayne Nickless is expected later this month to commit to building its Asian health-care franchise when new chief executive, Mr Peter Smedley, unveils his blueprint for the group.

However, today's annual meeting in Melbourne is expected to offer shareholders only scant insight
------------------------
Publicly Mayne Nickless has continued to commit to the expansion and development of its existing health care and logistic operations, - - -
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Mayne Nickless operates three hospitals in Indonesia and has one hospital under construction in Fiji with local joint venture partners. Analysts said the company could examine expansion into jurisdictions such as Hong Kong, Singapore, India and Malaysia.

MAYNE NICKLESS LIMITED: Chairman's Address To Shareholders
Australian Stock Exchange Company Announcements 11/14/2000

The last financial year can best be summarised as a very difficult one which produced a very poor performance. Along with all your Directors, I share your concern at what was a completely unacceptable outcome.

MAYNE NICKLESS LIMITED: Chairman's Address To Shareholders
Australian Stock Exchange Company Announcements 11/14/2000

SPEECH BY GROUP MANAGING DIRECTOR AND CHIEF EXECUTIVE OFFICER
Quite clearly this growth in costs has prevented Mayne Nickless from converting its revenue gains into higher profits.
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Despite the increase in underlying earnings, poor cost control resulted in slightly lower underlying margins. That it why we are addressing the group's costs as a matter of the highest priority.
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The contribution from the group's health care assets increased by $14.1 million to $91.6 million. We believe this improvement - and the better outlook for private health care generally - provides a strong basis for future growth in this segment of the group's business.
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I would now like to take a few minutes to discuss the outlook for the group going forward.
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Given those very good positions, it is more than reasonable to ask why the group's financial performance is not stronger.
----------------------
However, we acknowledge that there are also a number of internal factors which we can address to improve performance.

Mayne Nickless has had a poor approach to the management of costs. It has replicated its overhead costs through its previous autonomous business unit structure. That, in turn, led to an inability to leverage cross-business or, particularly in the case of our hospital network, the intra-business synergies that could have been harnessed to advantage.

The company operates a multiple brand structure and this presents a confused identity to the marketplace. You could be forgiven for asking, "What is the Mayne Nickless brand?" And, it appears that the optimum levels of synergies to be derived from integrating acquisitions have not been fully realised.
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So, let me outline to you how we are addressing this situation.

The strategic review is intended to deliver a clearly articulated group strategy, which I will share with you upon its completion and subsequent endorsement by the Board.
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Obviously, costs will be the more immediate outcome, ahead of the improvements we are seeking in revenue growth.
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In the interim, I would like to mention some of the work we have underway that will reduce costs and improve our earnings capacity.
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The elimination of duplication in the current structure will provide substantial cost benefits and ensure that Mayne Nickless becomes a variable cost business.

It will also bring about a stronger group orientation across the businesses.

Within the consolidated organisation, all business lines report to the Chief Operating Officer - - - - . This means our support functions will now serve the entire business.
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We have created a single group marketing function, and centralised business development and sales functions for each of the health care and logistics divisions.

Similarly, all Personnel activities have been taken out of the business units and consolidated into a group function.
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The Corporate services function combines all legal, secretarial and corporate administration functions into one department; and Public Affairs has also been consolidated into a Group function.

The resulting elimination of duplication in the current structure will provide substantial cost benefits as integration takes place, and create an environment for ongoing productivity improvement.

We have also undertaken a range of operational initiatives and I'd like to comment on some of those now.

The consolidation of group purchasing will allow us to make better use of our technology to lower our costs.

In pathology, we are integrating our previously separately run NSW businesses, which will bring greater synergies and productivity benefits.

The group's hospitals are being re-organised into an integrated network. This approach will assist in achieving a stronger clinical focus in our hospitals, a better product mix, and improved resource management.
----------------------------
We are reviewing the opportunities for growth, both organically and by acquisition.
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We are seeking to develop a health care model that ensures we can leverage the value of our extensive health care operations.
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All business cases for funding must be reviewed by the office of the Chief Financial Officer. Each proposal will be vetted under strict economic evaluation criteria, and the return on each proposal must exceed our weighted average cost of capital, and be subjected to a full post-implementation review.
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In conclusion, ladies and gentlemen, I look forward to joining you in twelve months time and reporting on a revitalised Mayne Nickless.

Investors Get Negative On Mayne Chance
Australian Financial Review 11/15/2000

Mayne Nickless suffered its biggest share price fall yesterday since the announcement of its new chief executive, Mr Peter Smedley, after the company ruled out any radical break-up of the group.
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Speaking at the annual meeting, Mayne's chairman, Mr Mark Rayner, said the company had taken a ``hard look'' at the divestment of one investment stream and had concluded that any spin-off would erode value.
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Mr Smedley played down the prospect of the company buying a health fund, saying an integrated health-care strategy needed a strong relationship with health funds but did not require ownership.

Mayne Warning On Lower Payout
The Age 11/15/2000 

Mayne Nickless has put shareholders on notice not to expect any more high dividend payout ratios, as it trims its sails under new chief executive Peter Smedley in the hope of restoring profitability after the horror run of recent years.
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But yesterday the company ruled out any plan to do this by splitting its health-care and logistics businesses or snapping up a health fund.
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Mr Smedley said measures already taken to improve and streamline the organisation - which included ending the duplication across Mayne's business units in such areas as personnel, information technology, finance activities and support functions - would have a modest impact in the first half.

``In the second half, however, we expect to deliver further business improvement which will have a much more obvious impact on the financial outcome, particularly as the full benefit of the first-half savings flow through.''
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``We are now beginning to negotiate with the funds as a network rather than on a hospital-by-hospital basis, which ultimately must be part of our strategy, because we believe we can better manage the network of the hospitals and pathology and integrated radiology as a complete network. We believe that management process will pay off for Mayne Nickless.''

Reduced Dividend Ratio Likely
The Age 11/15/2000

Pain in Mayne is plain.
The Australian 11/15/2000
Abstract:-- Australasian Business Intelligence:

Investors cut short the Pacman's honeymoon.
The Courier-mail 11/15/2000

Abstract:-- Australasian Business Intelligence:
- - Much of the decline was attributed to the company's plans to reassess its target dividend payout ratio of 75 per cent in order to support future business expansion. Mayne Nickless chief executive, Peter Smedley, said he saw growth potential in Asia for the company's logistics and healthcare businesses, but refused to give details. - - - - - while the group's hospitals will negotiate as a block to gain more power when agreeing on fee structures with health funds.

Asia key to ailing Mayne.
The Mercury 11/15/2000

Abstract:-- Australasian Business Intelligence:
- - - - Mayne Nickless has indicated that its medium term plans include restructuring and expansion in Asia.- - - - Mayne will aim to expand its Asian operations through an increased number of joint venture projects.

Private Hospitals In Recovery Ward
Business Review Weekly 11/17/2000

DIVESTMENT OF LOSS-MAKING UNITS AND GOVERNMENT INCENTIVES FOR HEALTH INSURANCE HAVE BRIGHTENED THE OUTLOOK FOR PRIVATE-HOSPITAL OPERATORS

After a bleak financial year, which ended with the three biggest operators of private hospitals declaring losses and asset write-downs totalling $360 million, listed hospital companies are staging a Lazarus-like recovery.
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The turnaround in the private health sector is a direct result of $2.3 billion in government incentives this year to encourage private health insurance membership, combined with the introduction of Lifetime Health Cover from July 1. - - - - the potential client base of private hospitals has grown by 2.7 million, to more than eight million. Private hospital occupancy rates are already rising, and should continue to do so.
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In the case of Mayne Nickless, there is constant speculation about the direction of the company under its new chief executive, Peter Smedley. Since his appointment on June 26, there has been an exodus of senior management from the hospital and logistics divisions. Most of these executives have been replaced with people who worked with Smedley when he was chief executive of the banking and finance group Colonial. The new general manager of the hospitals division, Paul Tissot, is a former Colonial executive.

Healthy rumours.
The Australian Financial Review 11/17/2000

Abstract:--- Australasian Business Intelligence:
On 16 November 2000, speculation is rife that Mayne Nickless is to purchase Australian Hospital Care (AHC).

Leader of the Pac.
The Australian 11/17/2000

Abstract:-- Australasian Business Intelligence:
The new chief executive of Mayne Nickless will unveil his strategic plan for the group on 23 November 2000. - - - He is likely to tackle the issues of branding and moving into more profitable areas of health, such as insurance. It could also signal major staff cuts.

Mayne Nickless may bid for Australian Hospital Care
AAP News 11/20/2000

Healthcare and transport group Mayne Nickless Ltd was expected to unveil a takeover bid for competitor Australian Hospital Care Ltd (AHC) after trading in the shares of both companies was halted today.
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A Sydney analyst said AHC would be a canny purchase for Mayne.

"There are a number of attractions for Mayne Nickless - it adds to their geographic coverage without a lot of overlap, with AHC being quite strong in Victoria," the analyst said.

Mayne stalks rival - AHC says initial bid on table.
The Courier-mail 11/20/2000

Abstract:--- Australasian Business Intelligence:
Mayne Nickless is expected to announce a takeover bid for Australian Hospital Care (AHC) on 21 or 22 November 2000.

Warburg Misses The Mayne Gig
Australian Financial Review 11/21/2000

As an addendum to the AHC bid (which we can be gratuitous in saying that we foreshadowed), Smedley still has to sort out his devil of a problem in diagnostics.

In the bidding war for private practices he can't compete with the likes of Sonic Healthcare and Medical Imaging Australia which can use far higher-priced scrip as consideration in acquisitions.

Next in Smedley's firing line may be the listed Revesco, which has changed its name to Medical Care Services. The pathology operator 50 per cent owner of Gribbles is looking cheap, according to analysts.

Smedley's Form Makes Mayne Move A Good Bet
Australian Financial Review 11/21/2000

Just four months to the day since he slipped his feet under the big Mayne desk still warm after Bob Dalziel's swift removal the great consolidator has lobbed a takeover bid worth about $330 million.
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Smedley's penchant for opportunistic takeover bids is on full display in Mayne's bid for Australian Hospital Care.

AHC has just begun the painful recovery from past mistakes when two major shareholders Malaysia's Landmark group and founder Mark Bryce are open to offers.
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Not all Mayne shareholders will enthusiastic about this deal. - - - the total Mayne bid (including debt) will cost about $330 million.

That's about 8.3 times AHC's claimed gross profits (EBITDA) from its core hospitals. Assuming those numbers are about right, this is not a cheap transaction.

Mayne Poised To Boost Margins
Australian Financial Review 11/21/2000

Peter Smedley has approached his task at Mayne Nickless in textbook style, cleaning out layers of management, stepping up the pace of change and now exercising classic Pacman tactics by increasing its share of the private hospital market.
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Where once each of the hospitals had its own chief executive, finance chief and other administrative functions, all that is now centralised, with health fund bargaining, links to the doctor networks and purchasing now done on a centralised basis.

If just three senior people at each hospital have gone, so have some $20 million in costs through the process.
----------------------------
The ACCC will come into play because as Smedley increases his hospital share from 20 per cent to 27 per cent, he will get a strangle-hold on the Gold Coast and in Melbourne and some divestitures may be necessary.
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This remains the key for Smedley, turning his increased market power into winning a better share of the Government-subsidised health-fund loot and no-one has yet found the winning formula.

The key is to control patients through their general practitioners.

Mayne Bids To Dominate Private Health IndustryStewart
Australian Financial Review 11/21/2000

Mayne Nickless is poised to make a $300 million takeover bid for Australian Hospital Care, triggering the first major step in the rationalisation of the private hospital industry.

If successful, Mayne Nickless will control about half of the country's private hospital beds, giving it a formidable position when negotiating reimbursement rates with private health funds.
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- - - - marks a significant step towards the company's goal of exploiting the economies of scale that come with being the biggest private hospital operator. - - - - as the private hospital sector exploits the increased uptake of private health insurance that analysts expect will mark a significant turnaround in private hospital profitability.
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AHC managing director Dr Michael Stanford said last night that rationalisation of the Australian private hospital market was inevitable. ``To improve revenues and improve costs, there has to be a consolidation of the private hospital market,'' he said.
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John Deakin-Bell, UBS Warburg health-care analyst, said the hospital sector was ready for a period of consolidation, which would occur ``sooner rather than later''. Earlier, AHC had said it had received a proposal on Sunday that ``might lead to a takeover''.

Mayne Gets The Classic Smedley Care And Attention
The Age 11/21/2000

The ink is barely dry on Smedley's lucrative contract to become CEO of Mayne and already he has signed off on a $535 million asset sale and, it appears, is about to launch a $200million bid.

If he does it would be classic Smedley, moving faster than anyone anticipates and grabbing just about every sensible opportunity that presents itself.

Acquiring AHC - - - - would be direction-defining.
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AHC hasn't been an indiscriminate developer/acquirer of hospitals - it has built clusters within which its individual hospitals tend to be fairly specialised. Bringing them next to Mayne's should enable Mayne to extract some of the scale benefits that are potentially available from running regional hospital networks.
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Smedley is a good acquirer but a better integrator. At Colonial, most of his acquisitions appeared fully priced but the scale of the synergies extracted, and the speed at which they were extracted, justified the prices paid.
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- - - until recently it (AHC) was haemorrhaging because of losses flowing from the La Trobe Regional Hospital and the Hobart Private Hospital co-location. La Trobe CEO Michael Stanford solved the La Trobe problem last month by handing it, and its $6 million-plus of losses, back to the State Government.
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- Mayne - - - shown its hand on one element of its strategy - simple expansion and pursuit of scale. - - - - in a more integrated and coordinated fashion. - - - a redefinition of Mayne's relationship with its immediate customer base, the private health insurers. - - - - Increased scale and concentration of ownership of the hospitals would help rebalance the relationship, as would a significant reduction in health-care costs - - .

Hospital Rivals In Hunt For Deal Tonic
The Age 11/21/2000

AHC's 26 per cent shareholder, Malaysian company Landmarks Berhad, signalled earlier this year that it was selling assets from its disparate property portfolio, after three years of mounting losses.

Mayne tipped to lift hospital stake.
Sydney Morning Herald 11/21/2000

Abstract:- Australasian Business Intelligence:
Australia's Mayne Nickless is tipped to acquire fellow hospital owner, Australian Hospital Care (AHC). - - - Mayne is likely to pay $A166 million-plus for AHC, possibly in scrip.

Mayne To Move On AHC In $330m Deal
Australian Financial Review 11/22/2000

Mayne Nickless is expected to unveil today a cash bid with a scrip alternative for Australia Hospital Care, valuing the target around $330 million.
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Analysts were upbeat about the proposed takeover.
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A successful takeover would see Mayne Nickless operating about one in two ``non-charity'' private hospital beds in Australia with about 6,200 beds, dwarfing its nearest competitor.

Mayne Nickless launches takeover bid for Aust Hospital Care
AAP News 11/22/2000

Mayne said it would make an off-market tender for AHC at $1.15 cash per shares.

It will also offer AHC a scrip alternative of one Mayne share for every 4.2 AHC shares.

Mayne Nickless shares soar on news of AHC takeover deal
AAP News 11/22/2000

Shares in Mayne Nickless bounced higher today after the healthcare and transport group unveiled its takeover bid for Australian Hospital Care (AHC). - - - pushed Mayne's shares as high as $5.20 in early trade - - - it had sealed a $395 million takeover deal with AHC, - - .
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- - Peter Smedley said the deal would give Mayne an extra 1,616 private hospital beds in Australia's eastern states, on top of its existing 4,518 private beds.

Mayne Nickless ratings affirmed by S&P after takeover bid
AAP News 11/22/2000

Standard & Poor's today affirmed its BBB long-term and A2 short-term ratings on Mayne Nickless Ltd (MNL) and its rated debt issues. The rating outlook is stable.
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"Should the acquisition of AHC proceed, the key challenges for MNL will be to successfully integrate the two businesses and generate significant improvements in operational performance."
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- - - - - providing significant opportunities for operational synergies by centralising key activities such as procurement, negotiations with private health funds, and information technology.
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- - - competitive market conditions and integration risk may constrain its ability to achieve a sgnificant turnaround in the short-term," the rating agency said.

AUSTRALIAN HOSPITAL CARE LIMITED: Intention To Make A Takeover Offer (Part A : Section 01 Of 03)

Mayne Nickless Limited today announced its intention to acquire Australian Hospital Care Limited, a major Australian private hospital operator.
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The Australian Hospital Care board has indicated that it intends to recommend the offer to its shareholders, in the absence of a higher offer and subject to there being no material adverse change to the value of the offer to accepting shareholders.
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"This move is also in line with Mayne's strategy to consolidate in our core industry sectors of health care and logistics.
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"Mayne expects to derive significant maintainable cost and revenue synergies following the integration of Australian Hospital Care. These synergies are expected to be fully realised by the end of the 2002 financial year."

PRESS RELEASE: S&P Affirms Australia Mayne Nickless Rtgs
Dow Jones Australia and New Zealand Report 11/22/2000

Classic Pacman Attack On AHC
Australian Financial Review 11/23/2000

You have to hand it to Peter Smedley. His quick bid for Australian Hospital Care has the crowds clapping and in classic Pacman style he's keeping his powder dry through an opportunistic capital raising.

Back of the envelope figures show that he's sitting on a war chest.

The cost of the AHC equity to Mayne Nickless is up to $203 million, while AHC has $174 million of debt on its books. This adds up to a $370 million-plus price tag.
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But if the company moves back to its long-term gearing target, the magic number is $500 million. (available for the next takeover)

Who's a target? Superficially there are four listed candidates: Medical Care Services (formerly Revesco), Ramsay Healthcare, Primary Healthcare and Medical Imaging Australasia.
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We can't finish this item without reminding readers that the ever-acquisitive Smedley was issued 2 million shares in Mayne Nickless at an issue price of $2.93 and financed by an interest-free loan to boot.

Based on its close of $5.25, the Pacman is sitting on a paper profit in the order of $4.6 million. Nothing to scoff at, given that he's only had the gig as the Mayne CEO for four months or so.

Mayne's Grab For Hospital Lead Role
The Age 11/23/2000

Analysts said yesterday the deal could start an overdue industry rationalisation in the wake of more Australians taking out private health insurance and the industry starting to pick up momentum.
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Mayne yesterday foreshadowed it would cut head office costs, rationalise non-clinical functions with a group structure, reduce medical and surgical supply costs, and deliver labor-mix improvements at the non-psychiatric hospitals.

It flagged new revenue streams, with pathology and diagnostic imaging services to be installed at Australian Hospital Care services in Victoria, and pathology operations to be established in the Gold Coast.

*Mayne Nickless to retain both divisions under strategic plan
AAP News 11/23/2000

Healthcare and logistics group Mayne Nickless would retain both divisions under a strategic development plan announced today.
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Chief executive Peter Smedley said the company was establishing a network business model to maximise returns from its business portfolio.

Mayne's $208m Bid For Private Hospitals
Sydney Morning Herald 11/23/2000

Significantly, and based on a 50 per cent acceptances of the cash offer, Mayne's gearing is expected to be about 19.5 per cent, placing it in a strong position for further acquisitions.
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Mr Peter Smedley, would first need to display his famous cost-cutting skills to prune back AHC's $300 million-plus cost base and exploit economies of scale.

Hospitals the winners in Mayne Nickless bid for AHC.
The Australian 11/23/2000

Abstract:-- Australasian Business Intelligence:
In Australia, Mayne Nickless will enjoy more bargaining power with health funds in its Australian Hospital Care (AHC) takeover. The health care operator will own 29 per cent of all Australian private hospital beds. - - - Australia's health insurers are flush with money, thanks to the Australian Government's $A2 billion-plus a year in membership subsidies. - - - Mayne's new strength will give it a lead in driving harder bargains, ensuring the hospitals, not just the insurers, share in the taxpayers' generosity.

Mayne hits high note.
The Advertiser, 11/23/2000

Focus falls on small radiology practices.
The Australian, 11/23/2000

Reputation is crucial to ...
The Australian Financial, 11/23/2000

Mayne plan wins praise.
The Courier-mail, 11/23/2000

Overhaul plan pays off.
The Daily Telegraph, 11/23/2000

Mayne's lift from new plan.
The Mercury, 11/23/2000

Revitalised Mayne eyes more growth.
The West Australian, 11/23/2000

Mayne To Cut Costs Then Expand In Asia
Australian Financial Review 11/24/2000

Mr Peter Smedley has unveiled his strategy - - - - pinning the company's growth on cost-cutting and improved marketing before seeking to expand in Asia. - - - he would look at buying health and transport assets offshore, particularly in Asia, to improve earnings.
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While analysts regarded the presentation as light on financial details, investors appeared unperturbed and drove Mayne Nickless shares to a 16-month high of $5.63. Some of that gain is attributable to reaction to the AHC bid.

Analysts said the former Colonial chief's much-hyped strategic blueprint was typical of his ambition to ``underpromise and overdeliver''. - - - He outlined a rationalisation of some transport depots, medical centres and technology functions. Mayne Nickless will also outsource some non-medical services, such as maintenance, cleaning and catering.

He said the company had a poor approach to cost management and repeated it would reduce the number of head office and support staff, including administration, technology, sales and marketing functions, across both the logistics and health care divisions. - - - He will also rebadge Mayne Nickless's disparate range of brands under the name ``Mayne'' for marketing purposes.
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``The opportunities in Asia in both sectors are absolutely open to us,'' he said, adding the company would get ``a better bang for your buck by doing something in Asia''.

Expansion, Rebadging Are Mayne Game Plan
The Age 11/24/2000

Peter Smedley - - - detailed expansion plans for a rebadged and revitalised healthcare and logistics giant.
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Mr Smedley's strategic plan will see Mayne rebranding itself, cutting costs, producing bigger profits and expanding its operations, particularly into Asia.

Since announcing that Mr Smedley was replacing Bob Dalziel - - - - the company's share price soar more than 90 per cent, adding close to $1 billion to its market value and placing it just outside the top 50. - - - - - Mayne Nickless was now armed with a dangerous amount of financial capacity, with plenty of room to grow after deciding to stick to its established model of health care and logistics.
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In the coming months, the new brand name ``Mayne'' will be rolled across its entire network as the company cuts costs and builds an efficient model that will ultimately expand offshore through transport and logistics acquisitions, particularly in Asia.
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Mr Smedley said the strategic review had found there had been poor cost culture, no leveraging of cross-business and intra-business synergies, multiple brands and confused market identities, and poorly integrated acquisitions.

The main game now, he said, was to streamline operations and put in place a network business model.

This model would include group purchasing strategies, elimination of duplication and outsourcing non-medical activities such as maintenance, cleaning and catering. - - - while developing a cost culture that will allow us to translate organic revenue growth on to the bottom line, returning the business to industry benchmarks,'' Mr Smedley said.

Mayne to cut costs then expand in Asia.
The Australian Financial, 11/24/2000

Mayne soars on Smedley's vision.
Herald Sun, 11/24/2000

Sonic Rules Out Counter Bid For AHC
Australian Financial Review 11/25/2000

Sonic Healthcare has ruled out any form of investment in hospitals, including launching a counter bid or taking a blocking stake in Australian Health Care, the subject of a takeover by Mayne Nickless.
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"Only a small proportion of revenues are sourced from the hospital sector in the order of 5 per cent,'' he said. - - - Mayne will transfer the existing pathology and radiology contracts at AHC's Melbourne hospitals from Sonic to its own businesses.

Healthy Prognosis For Mayne Nickless
Australian Financial Review 11/25/2000

Peter Smedley's decision to align Mayne Nickless's fortunes with the health-care sector was greeted enthusiastically by the market during the week, the stock jumping more than 14 per cent to a 23-month high. - - - - has seemingly turned the company from a perennial underperformer to a company leveraged to an industry in the early stages of development.
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``We are fully supportive of this strategy, despite the risks, and believe the private hospital industry is still in the early stages of a major recovery,'' commented Ord Minnett.

``Our view on Mayne Nickless in recent months has been positive in terms of rapidly improving industry conditions, but cautious given the substantial premium that was quickly assigned to the stock on the back of the Peter Smedley appointment.

``We now believe this management premium will be sustained and that the strong industry fundamentals remain compelling.''
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Other brokers were a little more circumspect about the move towards health care.

``Longer term we remain cautious on the ability to generate excess returns from the hospital network,'' JBWere said in a research note.

``The strategy presentation indicated that Maynes is achieving a step up in returns by implementing policies that allow them to be a relatively more efficient operator in hospitals.

``Our concern is that these initiatives are creating a relative operational efficiency difference, which can be reduced as competitors lift their operational game, rather than a structural competitive advantage,'' the broker said.

Smedley's Prescription For AHC by Alan Kohler
Australian Financial Review 11/25/2000

Once Mayne Nickless's Peter Smedley has wheeled Australian Hospital Care Ltd into his operating theatre, anaesthetised it and performed a headofficectomy, his next job will be to persuade a few surgeons to give up golf or at least to play during the week instead of weekends.

One of the keys to improving the profitability of private hospitals is to use the operating facilities seven days a week instead of five. Like airlines, modern private hospitals have very high fixed costs, so that ``flying empty'' corrodes profits.
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That is because hospitals are run for, and often by, doctors and they've got better things to do on the weekend than slice up patients. Smedley must teach doctors and patients to give up their weekends, either by paying doctors more or charging patients less for operations on Saturdays and Sundays.
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It is also important for Australia because restructuring at Mayne will spark change throughout the health-care industry, possibly for the better.

Apart from using hospital assets more efficiently, there are two things Smedley must do at Mayne to get more profits out of health: first, he must even up, if not flip, the balance of power between private hospitals and health insurance funds; second, he must harness the power of the GPs.
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The hospitals have thus been caught in a squeeze between demanding doctors and stingy health funds, and profit margins have plummeted.
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Having a greater share of the nation's sick people is not going to impress health funds. People who are in hospital, which is really what Mayne is acquiring with AHC, are not what health funds want because such patients make claims. The funds want healthy people who pay premiums and do not go to hospital.
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Market power will accrue to Mayne only if it builds a strong brand awareness and good image among healthy people, so that the funds cannot afford not to have contracts with Mayne for fear of losing paying customers, as opposed to claiming ones. There are only a few private hospitals in Australia that can boast this kind of brand strength.

That is why the brand and logo re-launch as part of Smedley's presentations during the week was, in some ways, more important than the apparently meatier AHC takeover.

The AHC acquisition is important, though, in two ways. If it is approved by the Australian Competition and Consumer Commission, it will give Mayne a virtual monopoly on the Gold Coast, which will flip the balance of power against health funds in that area, as well as provide tremendous market power in diagnostics and pathology.
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But harnessing the power of GPs is potentially far more lucrative for Smedley and Mayne's shareholders than hospital and pathology rationalisation. GPs are the gatekeepers of the health industry: a group of 20 generates about $50 million a year in health-care expenditure on drugs, pathology, diagnostics, surgery and hospital care.

There are two ways for Smedley to tackle the GPs: influence them by providing information technology support and practice management services, or own them. Given Smedley's track record, I'm betting on the latter.

Large corporate medical clinics are among the fastest-growing sectors of the health industry. - - - - - It would not be surprising if Smedley's next move was to act decisively to lead this trend, possibly by taking over Revesco.

The key to unlocking profits in the health industry is to exploit the interaction between GPs, pathologists, radiologists and hospitals in a specific region, not necessarily by achieving national economies of scale. And as Smedley demonstrated in one of his slides at a presentation during the week, GPs are at the centre of the health web.

The health-care business can be seen as a cottage industry run for the benefit of doctors, just waiting for someone to corporatise it. If Smedley is that person, Mayne shareholders will be the winners.

Lang Corp says to pay $47 mln for Mayne Nickless ports business
AAP News 11/25/2000

Lang Corp Ltd today said it would pay $47 million for Mayne Nickless Ltd's ports business.

Healthy lift in shares.
The Advertiser 11/25/2000

Abstract:-- Australasian Business Intelligence:
This means they have risen 80% since Peter Smedley was appointed CEO on 26 June 2000.

Mayne Job For Smedley: To Turn Growth Into Performance
The Age 11/29/2000

Perhaps the most telling thing Peter Smedley said last week at the unveiling of Mayne Nickless' strategic review was that, in effect, for a corporate basket case, Mayne was in surprisingly good shape.
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That makes the task ahead of Smedley and his team quite different from the one they encountered when they arrived at Colonial.
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Mayne's strong market positions and its levels of revenue growth mean that the immediate task is to translate that top-line growth into respectable bottom-line performance.
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The over-lapping second, and slightly more complex, phase of the program is to tease out the synergies that ought to be available within Mayne's portfolio of healthcare businesses and even between the healthcare and logistics operations.
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More broadly, the strategy is predicated on creating an acutely cost-sensitive culture throughout the group.
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In healthcare, there are significant synergies available from managing the hospital portfolio, the pathology and diagnostics groups and Mayne medical centres as an integrated healthcare portfolio operating under a common brand.
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Smedley describes hospitals as a network business. In truth, what Mayne has is less a network than a group of regional clusters that can be managed as regional networks. - - - - then layering the head office synergies on to those regional networks offers Mayne the opportunity to reinvent the economics of these businesses.
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The Smedley analysis of Mayne prompts the question why, if the strategy for improving Mayne's performance was so obvious, it wasn't pursued earlier.

The answer probably lies in a mix - - - - and, ultimately, the absence of the absolute single-mindedness, even ruthlessness, that characterises the Smedley approach. Smedley doesn't listen to excuses, let alone accept them.
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In the medium term it involves changing some of the industry dynamics for the healthcare division.

Simple scale, better cost structures and the integration of the range of healthcare services ought to strengthen Mayne's negotiating position with the health funds, as would a stronger relationship with the general practitioners who ultimately direct patients into the Mayne catchment area.
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Smedley, - - - - is keen to develop both strands of his new group into the region.

That is partly from necessity - there is a limit to Mayne's growth through acquisition in the domestic market both because of the relatively limited opportunities to acquire meaningful businesses and the workings of competition policy - but also because of the scale of the opportunities.
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None of the big United States or European healthcare operators has a meaningful presence in the region (Asia) and the local operators are not that large or sophisticated. There is a tremendous opportunity for Mayne to emerge as a powerful regional player and add a long-term growth dimension to its businesses well beyond that available in the domestic market.
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- - - - suggest there is now a realistic prospect that Mayne's latent potential may be about to be unlocked.

Mayne Nickless
Newcastle Herald 12/02/2000

MAYNE Nickless' (MAY) internal review of its operations has found a poor cost culture, lack of business synergies, a confused market identity and poor integration of acquisitions, says Hartley Poynton. Management has 10 initiatives to fix these deficiencies.

Mayne Nickless intends to keep AHC mostly the same
AAP News 12/06/2000

"The assets and business of AHC Group are complementary to those of Mayne health and Mayne intends to continue to operation of AHC's business," the statement said.
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The company said the changes may result in some reallocation of staff or redundancies, but did not nominate a target figure.

Mayne To Cut Payout Ratio For Growth
Australian Financial Review 12/07/2000

In a bid to fund growth, health and logistics group Mayne Nickless Ltd plans to cut its dividend payout ratio to 40 to 50 per cent of operating profit after tax, down from the present level of 75 per cent.
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``This target range change is designed to facilitate funding of anticipated growth in Mayne's businesses,'' the company said.

ACCC warns on takeovers.
Herald Sun 12/07/2000

Abstract:- - Australasian Business Intelligence:
The Australian Competition and Consumer Commission says it is carefully examining two takeover bids. The two cases involve bids from Mayne Nickless and PaperlinX. - - - It says the effect on patients and customers must be considered.

Dissenting Duo Stalls Mayne's Bid For AHC
Australian Financial Review 12/21/2000

Two AHC directors representing Malaysian group Landmarks, which holds 24.4 per cent of AHC, stated in the target statement released yesterday that the bid did not reflect fair value.

Landmarks is understood to have bought into AHC at a price above Mayne's cash and scrip alternative bid for the Melbourne-based group.

The other company directors recommended the offer, in the absence of a higher bid.

Mayne Targets Nursing Costs
Australian Financial Review 12/21/2000

Private hospital giant Mayne Nickless is planning a controversial new staffing scheme aimed at slashing costs.

The plan has raised strong concerns about damage to the quality of care at Mayne's 46 hospitals across the country, which would be forced to rely more heavily on lesser-qualified nursing staff.

According to one executive, who did not want to be named, the company has targeted cost savings of between $15 million and $30 million a year, or 5 to 10 per cent of nursing costs.

The Australian Nursing Federation has attacked the move. Its federal secretary, Ms Jill Iliffe, said yesterday: ``The changes will have a devastating effect on the quality of care.

``It is unthinkable that so much public money is going into private health insurance at the same time private organisations are trying to cut costs and reduce services.''

An internal company document, dated November 2000, outlines a plan to restructure its hospital care, with much greater reliance on nurses who provide ``lower'' levels of care, such as assistants in nursing (AINs).

While registered nurses require at least three years of formal training, AINs are not required to have any formal training.
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Mayne Nickless's public affairs manager, Mr Andrew Scannell, confirmed late yesterday that the company was considering changes to its model of nursing care but denied specific cost-saving targets.
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According to Mr Scannell, the company strategy is to increase the number of full-time nurses, and reduce reliance on agency nurses which would save money.

``Any model wouldn't be about cost-cutting, it would be about maintaining and enhancing patient care,'' he said.

The confidential Mayne document outlines a company plan to rely more heavily on AINs and other staff less qualified than RNs. It talks of a ``shift away from the mandate that the RN is responsible for the total care needs of the patient''.

Mr Scannell told The Australian Financial Review: ``Any model would be based on a team approach in which RNs provide clinical care, and other team members provide appropriate support to RNs.''

Changing the mix in the hospitals, which operate under the banner of Health Care of Australia, towards less qualified staff would clearly save the company money, but may provoke strong reactions from qualified nurses, whom Mayne already has trouble attracting.

``It makes no sense, at a time when hospitals are dealing with patients with more complex care needs, to change the skills mix to employ less qualified people,'' Ms Iliffe said.

``It's a recipe for disaster, and consumers should be up in arms about it.

``We will resist any major cuts to nursing budgets, right across the country.''

The internal Mayne document predicts nursing resistance will pose the greatest risk to the changes. It then details psychological methods of convincing staff to accept the new model.

``It is necessary to identify and work with those opinion leaders who will support the innovation and be ready for `damage control' for those who will not support the change.''
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Those familiar with the company's operations say Mayne's hospitals already operate ``close to the bone'' in terms of their nursing staff.

According to nursing union officials across the country, any move to introduce less qualified staff and slash budgets could easily backfire, with the company finding it even more difficult to attract and keep qualified staff.

*Mayne may alter AHC bid after director objections
AAP News 12/21/2000

They also objected to the 90 per cent acceptance condition and questioned the sustainability of Mayne's share price in the absence of a full merger.

Malaysians stymie Mayne buy.
The Australian 12/21/2000

Abstract:-- Australasian Business Intelligence:
Mayne Nickless' bid to acquire Australian Hospital Care (AHC) may fail in mid-December 2000. Two directors of Malaysia's Landmarks Berhad, - - say that Mayne's offer falls short of a net asset value of $A1.25 per share.

Takeovers - Dec 23
AAP News 12/23/2000

Mayne Nickless will formally offer for all of the company's shares not already held.

Nursing Arrangements Not About Cutting Costs: By Megan
Canberra Times 12/24/2000

MAYNE Nickless, owner of Canberra's National Capital Private Hospital, says its plans for new nursing staff arrangements are about improving patient care, not cutting costs. - - - - Mayne Nickless's public affairs manager, Andrew Scannell, said those figures were not correct.

He said the company did intend to try to save money by hiring more full-time nurses and using fewer agency nurses but it was impossible to estimate the savings. Mr Scannell said assistants in nursing had three months' training and did basic duties such as changing beds and cleaning. He said registered nurses, who had at least three years' training, should not be doing menial tasks that could be performed by assistants in nursing.
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''In any of our hospitals no-one is performing duties above what they are qualified to do,'' he said. Mayne Nickless was not subjecting hospitals to an overall, formal review, he said.

Health Care A Team Effort
Australian Financial Review 12/28/2000

The Australian Nursing Federation is running an unfounded scare campaign, both through your newspaper ("Mayne targets nursing costs'', AFR, December 21) and other media, based on an old-fashioned model of health care.

Modern health care delivery demands a team approach.

Our union is one of the largest health unions in this country, so we were most interested in the reported planned reforms by the major hospital provider, Mayne (formerly Mayne Nickless), and the comments on these reforms from the ANF.
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The changes in health practice and technology have resulted in our members working alongside many doctors and other skilled people, who work together as a team in the type of modern hospitals that Mayne runs in Australia.

We do not believe that either AINs or RNs would appreciate the self-serving, sectoral approaches now being taken by the ANF as reported in the media.

The LHMU Health Union represents a wide range of workers in the health industry, including enrolled nurses, assistants in nursing, personal care assistants, orderlies, cooks, cleaners, security personnel, gardeners and maintenance staff more than 150,000 hard-working women and men in Australia.

Healthcare And Utilities Rule
Australian Financial Review 12/28/2000

Healthcare, and infrastructure and utilities stood above the crowd in 2000 as investors turned their backs on tech stocks and cyclical sectors fell on concerns of an economic slowdown.
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It was only eight months ago that infrastructure and utility companies were market wallflowers, unloved and neglected by a market infatuated with the new economy.

Mayne Bid Still Healthy
Australian Financial Review 12/29/2000

Transport and health-care group Mayne Nickless' $330 million bid for Australian Hospital Care remains likely to succeed, despite a key AHC shareholder reportedly saying that a rival bid is possible.

Mayne Set To Pay Up As Nurses Move On
Australian Financial Review 01/11/2001

Australia's biggest private hospital operator, Mayne Nickless, is understood to have struck a lucrative new wages agreement with nurses in its home state of Victoria as it fights to stem the exodus of staff to the public sector.
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Yesterday, Ms Belinda Morieson , the secretary of the Victorian branch of the Australian Nurses Federation, warned that some hospitals faced losing up to 20 per cent of their staffs to the public sector in the wake of the lucrative public sector agree