Abano Healthcare, the Australasian dental centre and radiology operator under a partial takeover offer from dissident shareholders, expects to pay a first-half dividend of between 11 and 16 cents per share.
Abano's directors have said they were previously prohibited from making a payment due to the conditions of the offer from Anya and Peter Hutson and James Reeve of Healthcare Partners, however they have now agreed to the payment of an "appropriate" dividend so long as the value is deducted from the $10 per share offer price, Abano's board said in a statement today.
Based on its expectations for underlying profit of between $5 million to $5.6m in the six months ending November 30, Abano expects to pay a first-half dividend of between 11 and 16 cents a share, up from 10 cents a share in the year-earlier period, it said. On that basis, it expects the takeover offer from Healthcare Partners would reduce to between $9.84 to $9.89 per share for the 30.99 per cent of Abano shares it wishes to acquire. The shares last traded at $8.41.
The dividend is subject to formal confirmation of approval from Healthcare Partners, Abano said, noting that Healthcare Partners had refused to allow Abano's dividend reinvestment plan to operate for the first-half dividend.
"The indicative dividend range is being announced at this time to ensure shareholders are fully informed and the dividend position is clear before any takeover offer is made," Abano said. "The board believes that the public communications from Peter and Anya Hutson and James Reeves about the payment of dividends have been confusing to shareholders and their subsequent media statements to clarify 'misleading claims by Abano' in regards to the dividend issue have been disingenuous and incorrect."
Healthcare Partners holds about 19 per cent of Abano and is seeking further shares to build a 50.01 per cent controlling stake in the healthcare investor. 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.
Abano's board last week reiterated its advice that shareholders should wait for a formal recommendation with an independent adviser's report before accepting the partial takeover offer, with the board's early view that it's not in investors' best interests.
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.