Abano Healthcare's board has reiterated its advice that shareholders should wait for a formal recommendation before accepting a partial takeover offer from dissident shareholders Anya and Peter Hutson and James Reeves, with the board's early view that it's not in investors' best interests.

Chairman Trevor Janes and directors Pip Dunphy, Ted van Arkel and Danny Chan have told shareholders not to commit to the $10 a share offer from Healthcare Partners Holdings, an entity set up by the Hutsons and Reeves that's seeking to build a 50.01 per cent controlling stake in the healthcare investor, until the get an official recommendation with an independent adviser's report. The shares rose 0.5 per cent to $8.45, still below the offer price.

"This is a company associated with Peter and Anya Hutson and James Reeves, who have all been involved in previous attempts to gain control of Abano and force changes to Abano's board," the directors said in a letter to shareholders. "These prior attempts were unsuccessful and disruptive to Abano, and have cost Abano and its shareholders in excess of $1 million, not including management time."

The Hutsons and Reeves poured about 4.1 million shares, or 19 per cent of Abano, into the Healthcare Partners entity, and if the bid is successful, they would seek changes to improve the company's performance by halting acquisitions in the medium term in order to reduce debt, and improving the dental practices' operations. They would also install three new directors.


Peter 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 offer was turned down by the Abano board as being too low. Archer was refused due diligence access because it could become a direct competitor to Abano, and Peter Hutson left the board. They later tried to oust chairman Trevor Janes, calling a special meeting of shareholders, though the resolution was voted down, and they unsuccessfully opposed Janes' re-election at the company's latest annual meeting.

Abano's directors today said the Hutsons and Reeves have refused them to declare a normal interim dividend in December, which would have been paid in January.

"They could have easily adjusted the proposed purchase price on any shares acquired by them, to enable you to receive your usual dividend on the shares you own," they said.

The board stressed that the Healthcare Partners bid was a partial takeover and that scaling of acceptances made it highly unlikely any sellers would be able to exit their entire holding at the offer price.

"You may be called by other parties and pressured to accept early; however, there is no benefit in early acceptance," they said. "Shareholders will not be paid until after the offer becomes unconditional and the extent of any scaling becomes clear."