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Abano Takeover Offer: No Further Extensions


Abano Takeover Offer: No Further Extensions

23 November 2007: Masthead today advised the market that it would not be making any further extension to the closing date of its final $5.00 per share offer to Abano shareholders.

The offer will therefore close on the 10th of December 2007.

Masthead’s Mark Stewart said: “We are convinced that this is a very good price. Indeed informal feedback from various parties gives us a high level of confidence that our offer will be successful”.

In support of this view Mr Stewart made the following comments:
• Masthead’s offer price exceeds the market price for Abano shares
• The $5.00 per share offer price represents a 47 per cent premium to the price at which the Abano shares were trading at immediately prior to Masthead making its offer
• Detailed analysis of takeover premiums in the New Zealand market shows that the average premium paid in successful offers is 31 per cent - Masthead’s 47 per cent premium therefore represents a healthy premium for control
• Many shareholders will have paid prices for their shares well below $5.00, with some looking at a four-fold plus gain. Taking a profit now must be attractive for them given the real risks that Abano faces in achieving its bullish earnings targets over the next five years
• In the absence of an offer it is highly likely that the Abano share price will fall

Mr Stewart further noted that Abano had been in play for more than two months and despite efforts by the board no alternative offers have emerged.

“As a 20 per cent shareholder we have been concerned about the apparent ease at which Abano has allowed parties to do due diligence. In particular, we are unhappy that a competitor, that the Abano board stated was only interested in part of the business, was allowed into the process. We understand this party, which pulled out of the process last week, also had real issues with the Independent Adviser’s report and the total lack of consideration given to the execution risks in achieving management’s five year projections as well as the obvious competitive risk that Abano faces.”

Mr Stewart said for the offer to succeed it only needed 38.8 per cent of the shares not held by Masthead to achieve its 51 per cent target.

“That is very doable but I expect it to go down to the wire as larger holders tend to accept on the last day.”


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