Shares of the embattled Primary Health Care Limited (ASX: PRY) have risen strongly today on the back of further takeover speculation. The shares rose as much as 9.2% to a high of $4.15, although they have since retreated to $3.98 – up 4.7% at the time of writing.

Primary Health Care has run into some strong headwinds recently, which have acted as a huge drag on the group’s share price. This has largely been caused by the Federal government’s review into the Medicare Benefits Schedule and the plan to scrap bulk-billing subsidies for pathology and imaging. Capitol Health Ltd (ASX: CAJ) and, to a lesser extent Sonic Healthcare Limited (ASX: SHL), have also been impacted.

As a result of its falling share price, there have been rumours of a potential takeover bid for the healthcare group. That speculation was exacerbated yesterday afternoon (with shares rising 5.6%), after the group confirmed that the Asia-based Haitong Group had acquired a 5.78% stake in the business which is now worth nearly $120 million.

Then this morning, the company also announced that the China-based Jangho Group had snapped up 58,225,523 shares in the business, representing an 11.17% stake. Jangho already has a presence in the Australian healthcare sector after it acquired Vision Eye Institute in 2015.

According to Health Investor Asia, Jangho was quoted as saying its most recent investment had been made based on “confidence in Primary’s name recognition” and “its development prospects”. The same source also noted that the Haitong shares form part of the voting power of the Jangho Group due to an equity swap arrangement with one of its subsidiaries.

Of course, this doesn’t mean or guarantee that a takeover is in the works, and investors shouldn’t invest in Primary Health Care based on that reason alone. In saying that, investors do appear confident that such a scenario might play out.

At $3.98, the shares have rebounded a total of 87% since mid-February when they traded at $2.13, although they’re still a long way off their 52-week high of $5.52.

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The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.