Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Abano board hits back at dissident shareholders

Abano board hits back at dissident shareholders

By Pattrick Smellie

April 10 (BusinessDesk) – Abano Healthcare chairman Trevor Janes has hit back at rebel shareholders calling for his resignation, rubbishing claims he was not independent and accusing his attackers of a campaign of “selective, deceptive, and misleading” comments.

Healthcare Industry and Steamboat Capital, which jointly hold some 19 percent of Abano shares, are behind the attempt to oust Janes by re-running part of the Nov 26 annual meeting, claiming Janes was not an “independent” director as claimed.

HIL is associated with Peter Hutson and Steamboat with James Reeves, who were involved last year in an Archer Capital-led takeover bid last year for Abano, which has dental businesses on both sides of the Tasman, as well as diagnostics, rehabilitation and audiology interests.

In a statement issued to the NZX this afternoon, the Abano board said it saw “no merit in the Hutson/Reeves comments and will consider whether further response is required in due course.”

“The board supports Trevor Janes as chairman and remains unanimous in its support of the company’s strategic direction and all its responses to Hutson/Reeves.”

The two shareholders claimed in extensive documentation released today that Abano consistently failed to meet its own forecasts of profitability, that its corporate dental business model was producing half the gross margin that a “one man band” dentist could expect to earn, and called for an immediate halt to planned dental business acquisitions in New Zealand and Australia.

They want Janes replaced as chairman in a first step to ousting the entire current board and a strategy review.

The Abano statement makes no reference to Hutson and Reeves releasing a critique by accounting firm Korda Mentha of a valuation report by Grant Samuel, which they say Janes should have made available to shareholders before last year’s annual meeting, rather than reading elements of it.

While Grant Samuel purported to be independent, they were in fact contracted to Abano, Hutson and Reeves claim. They also complained to the head of NZX Regulation about the timing of the Grant Samuel report’s posting on the NZX website.

They alleged a waiver from the NZX for directors of the Accident Compensation Corp potentially favoured Janes by allowing him to claim independence as chairman of Abano, despite ACC holding a 6.8 percent stake in Abano. That should have created a “disqualifying relationship”, the rebel shareholders argue.

The Abano board said it had taken legal advice and consulted the NZX before confirming Janes as an independent director “prior to the publication of the 2013 annual report and the 2013 annual meeting.”

“Subsequent to that, NZX has issued a class waiver relating to independent director requirements in relation to all Accident Compensation Corporation board members.”

“Regardless, Mr Janes’ independence is irrelevant and has no corporate governance implications for Abano as the number of other independent directors of Abano has at all times exceeded NZX requirements,” Abano said.

The company had also provided market guidance on March 18 for the 2014 financial year, which was “up on last year, ahead of brokers’ expectations and ahead of the forecast which was set out in Grant Samuel’s independent valuation report.”

Grant Samuel had reaffirmed its valuation report last month, in which it valued Abano’s shares at more than $9 a share, well above the initial indicative bid from the Archer consortium of between $6.97 and $7.14, subsequently raised to $7.80.

The Korda Mentha says that was $2.67 too high, on a mid-point valuation range basis and offers a revised valuation of $6.46 per share.

“We are disappointed that Hutson/Reeves continue to refuse to engage with the board, despite numerous invitations to meet with the full Abano board and/or board representatives,” the company said.

“We are not surprised, that Mr Hutson, who failed in an attempt to take over the company at benefit to himself above other shareholders, continues to attack the credibility and value of the company.”

Abano shares were trading at $7.20 on the day of last year’s annual meeting and had fallen as low as $5.90 by Feb. 4 before recovering to a high in 2014 of $6.80 at the end of March. In the first 10 days of April, they have fallen to trade this afternoon at $6.45, a 0.5 percent recovery on yesterday’s close.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news