Abano Healthcare recommended investors continue to reject a partial takeover bid for the medical investor after Healthcare Partners raised its offer price yesterday. Abano also refused to allow access to its books to pave the way for a potential full takeover offer.
Healthcare Partners, whose shareholders include Anya and Peter Hutson and James Reeves, yesterday increased its partial takeover offer by 16 cents per share to $10.16 per share, although Abano's recent 16 cent dividend payment would be deducted from the total. It's seeking to build its stake to 50.01 per cent and said yesterday it will consider mounting a full takeover bid for Abano provided it can get access to the company's accounts.
"Our advice to shareholders is to reject the revised offer," Abano chairman Trevor Janes said in a statement today.
Abano's board said it still considers that the risks of the partial nature of the offer continue to substantially outweigh the revised offer price, given that investors are likely to be left as minority shareholders in a company controlled by Healthcare Partners, which it said "has its own agenda with an unclear and unspecified strategy".
"The board is not soliciting bids for Abano and therefore unanimously rejects the suggestion from Peter Hutson, Anya Hutson and James Reeves that Abano should open up the company to allow due diligence by Healthcare Partners and other unspecified and as yet unidentified 'interested parties' to 'explore the possibility of making a 100 per cent offer'," Janes said.
The Hutsons and Reeves already own about 19 per cent of Abano, and their offer to raise their stake to 50.01 per cent closes on March 3. They launched the offer saying they want to improve the company's performance by halting acquisitions in the medium term in order to reduce debt, while improving the dental practices' operations. They would also install three new directors.
Abano's valuation range by independent adviser Grant Samuel was criticised by Healthcare Partners as using unrealistic assumptions, and was later revised to reflect shares issued as part of management's long-term incentive scheme, putting a fair value of between $9.92 and $11.93, from $9.95 to $11.96.
The company's shares last traded at $8.70, and have gained 34 per cent over the past year.