Abano Healthcare has announced an increased headline price of a takeover offer as the business is flooded with dental appointments.
Abano's board had already unanimously recommended shareholders accept a Scheme of Arrangement offer from BGH Capital and Ontario Teachers' Pension Plan at $4.45 per share and subject to certain conditions.
This was lifted to $4.75 on October 10 and today Abano said this price had been raised to $5.20 a share following an updated valuation from independent adviser Calibre Partners, which now gives a range of $4.95 to $5.80 per share.
The stock climbed 48c, or 11 per cent, to $4.82 on the news.
Abano issued a trading update at the same time, saying group revenue for October was $1.9m ahead of management forecasts, with underlying EBITDA ahead by $600,000.
"These results exceed the management forecasts used by the independent adviser in determining its valuation range for Abano shares in its report dated 9 October 2020," Abano said, adding that forward bookings for the next two months are higher than at the same time last year.
"This has led to an increase in the forecast appointments for the next two-month period, with Lumino in particular continuing to out-perform management expectations."
Underlying ebitda for financial year 2021 is now expected to be between $34m and $35m (previously $32m), plus government wage subsidies of $10.6m, totalling $44.6m to $45.6m (previously $42.2m).
The forecast assumes no further Covid-19 lockdowns and includes $0.6m in recurring and non-recurring cost savings.
Abano also said a capital raising was no longer necessary if the scheme does not proceed.
"Given the actual trading performance in the year to date, the near term outlook and reduced net debt levels, the board has determined that there is sufficient capacity and covenant headroom under the current debt facilities to meet the foreseeable needs of the business."
Abano had previous noted in the scheme booklet that if the buyout did not go ahead, the company would likely undertake a capital raising of between $30m and $60m, which may dilute the interests of current shareholders.
"The board now considers that the company's capital structure does not need to be addressed in the near term. Abano's banking partner is supportive of the company and there is no requirement or review event in Abano's banking facilities requiring a capital raising."
A shareholders meeting has been moved to 25 November 2020, to allow for shareholders to receive and consider the updated information before voting.