Australian private equity group Crescent Capital Partners has increased its share in takeover target Abano Healthcare to 19.9 per cent after reaching agreements with institutional shareholders - taking it a step closer towards it 90 per cent target.
Yesterday Crescent acquired a further 8.7 per cent after Brook Asset Management and BT Funds Management agreed to sell all of their shares and Salvus Asset Management and ACC sold partial shareholdings for an average of $5.15 per share.
The purchase was below the $5.20 offer but the deals include an escalation agreement which means that if Crescent increases its offer above $5.20 the parties will receive the difference.
Crescent said the agreement did not mean it was intending to increase the offer but was designed to ensure that the sellers would not be disadvantaged should it do so.
Crescent executive director Michael Alscher said it saw the agreements as confirmation that other shareholders also doubted the confidence expressed by the Abano board in forward projections for growth in the company.
Last week the board rejected Crescent's $5.20 offer as being too low and told shareholders not to accept it after receiving an independent report from KordaMenthe which put the valuation range of the company at between $5.15 and $5.90 per share.
Yesterday Abano board chairman Alison Paterson said she did not believe the sell-up had anything to do with the investors not believing in forecasts by the company and the escalation agreement was further proof that the offer could go further.
Paterson said the board was also waiting to hear back from Crescent on whether it could go ahead with an indicative dividend payment of 8.5 cents a share.
Abano's share price closed at $5.15 yesterday.