Abano Healthcare Group has hired Grant Samuel to assess a partial takeover offer from dissident shareholders Anya and Peter Hutson and James Reeves, which the board says is not in the best interests of other investors based on its preliminary view.
The group wants to buy 30.99 per cent of the company, or 6.65 million shares, at $10 apiece to build a controlling 50.01 per cent stake in Abano, via a new entity they've set up called Healthcare Partners Holdings. Hutson and Reeves have been lobbying for change at Abano for several years, supporting an informal takeover bid in 2013 by Archer Capital at $6.97 a share, which would have seen the Australian private equity firm take the healthcare investor's dental businesses and hand the audiology units to Hutson for a nominal sum.
"The Abano board's preliminary view is that the partial nature of this offer is not in the best interests of all shareholders and does not reflect full and fair value for the control that would be attained by Peter and Anya Hutson and James Reeves, or appropriate compensation for all of the risks associated with remaining a minority shareholder in the company," the company said today.
It said the premium for a partial takeover must compensate shareholders for passing control to a majority shareholder where shareholders are highly unlikely to be able to sell all of their shares into the offer, the risk of reduced liquidity and probable decline in market price on any retained Abano shares after the offer. Shareholders should also take into account "the significant reversal in Abano's growth strategy which is being proposed in the draft offer", it said.
Abano said that since Hutson's last attempt to gain control in August 2013, the share price had risen 41 per cent. The company had "an experienced and capable board" as evidenced by the performance of the company. The company has retained law firm Harmos Horton Lusk and brokerage Forsyth Barr as advisers to assist in evaluating and responding to the proposed offer.
The shares last traded at $8.30 and have gained 9.5 per cent this year, outpacing the NZX 50 Index's 6.5 per cent gain.