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

 


Abano calls dissident shareholders’ bluff with cash offer

Abano calls dissident shareholders’ bluff with unconditional cash offer

By Pattrick Smellie

April 14 (BusinessDesk) – Abano Healthcare is challenging a dissident shareholders' view of the group’s value by offering a price for 50 percent-owned Bay International well above the valuation given last week in a report for investors Peter Hutson and Michael Reeves.

Abano is offering to buy the 50 percent of Bay, an audiology business, owned by Hutson, for $12.9 million. That compares to a value range of between $6.3 million and $9.4 million for the stake in a report by Korda Mentha, which was issued last week in support of Hutson’s and Reeves’s bid to unseat Abano’s chairman Trevor Janes.

The Korda Mentha report’s findings are at odds with a report for Abano by investment house Grant Samuel, which Janes used to justify rejecting informal takeover bids for Abano that went as high as $7.80 a share from Hutson/Reeves interests, who collectively own 19 percent of Abano. Hutson resigned as an Abano director during the takeover manoeuvrings last year.

Abano shares were trading at $6.41 on the NZX this afternoon, down 1.1 percent on Friday’s closing price.

Abano’s chief operating officer, Richard Keys, told BusinessDesk the company could finance the $12.9 million purchase without stretching its balance sheet, as it had $50 million of undrawn credit facilities and headroom on its banking covenants.

He denied the suggestion the bid was less a serious attempt at ownership than an attempt to prove that Korda Mentha was wrong about the value of the Abano group as a whole.

“What Hutson and Reeves are saying is that the value of Abano should be much lower,” said Keys. “We don’t think that’s so. If they want to sell, we are happy to settle in cash.

“If they accept the valuation of $12.9 million, then that shows the Korda Mentha valuation was too light,” Keys said.

A successful takeover of Bay Audiology would not remove Hutson or Reeves from the Abano register, so they would be free to continue to campaign against the current board and management, whom they accuse of a failed strategy of expansion into Australian dental businesses, which is producing inadequate margins.

Abano argues its expansion strategy requires investment up-front in head office capability and overheads that mean enhanced returns will only be seen once the investment to gain scale has been completed.

Institutional investors canvassed since last week’s announcements of the Hutson and Reeves attempt to re-run parts of last November’s annual meeting had found “strong support for Trevor (Janes), the full board, and the strategy,” said Keys.

In a statement to the NZX, Abano says the purchase of Hutson’s stake in Bay International would “resolve all current management, governance and ownership issues.”

“This offer is a genuine attempt to resolve a long running dispute between interests associated with Mr Hutson and Abano in relation to Bay International,” said Janes. “While our partnership has produced many positive benefits to both shareholders in the past, it is now time for that partnership to end and we hope this helps resolve the issues between us.

“We have previously offered to Mr Hutson to either buy his holding or sell our holding in Bay International and, while that offer was never responded to, we are happy to now make a formal offer at a level which we believe should be an attractive price for both a buyer and a seller.”

Hutson has yet to respond.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Keep Digging: Seabed Ironsands Miner TransTasman Tries Again

The first company to attempt to gain a resource consent to mine ironsands from the ocean floor in New Zealand's Exclusive Economic Zone has lodged a new application containing fresh scientific and other evidence it hopes will persuade regulators after their initial application was turned down in 2014. More>>

Wool Pulled: Duvets Sold As ‘Premium Alpaca’ Mostly Sheep’s Wool

Rotorua business Budge Collection Limited (Budge) and sole director, Sun Dong Kim, were convicted and fined a total of $71,250 in Auckland District Court after each pleading guilty to four charges of misrepresenting how much alpaca fibre was in their duvets. More>>

Reserve Bank: Labour Calls For Monetary Policy To Expand Goals

Labour's comments follow a speech today by RBNZ governor Graeme Wheeler in which Wheeler sought to answer critics who variously say he should stop lowering interest rates, lower them faster, or that inflation-targeting should no longer be the primary goal of the central bank's activities. More>>

ALSO:

BSA Extension And Sunday Morning Ads: Digital Convergence Bill Captures Online Content

Broadcasting Minister Amy Adams has today announced the Government’s plans to update the Broadcasting Act to better reflect today’s converged market... The Government considered four areas as part of its review into content regulation: classification requirements, advertising restrictions, election programming and contestable funding. More>>

ALSO:

March 2017: Commerce Commission Delays Decision On Fairfax-NZME

The Commerce Commission has delayed its decision on the proposed merger between NZME and Fairfax Media's New Zealand assets, saying the deal is complex and it needs more time to assess the impact on both news content and the advertising market. More>>

ALSO:

Plan Plan: Permanent Independent Hearings Panel Proposed For Planning

The Productivity Commission recommends creating a permanent independent hearings panel like the one that cut through local politics to settle Auckland’s Unitary Plan, for the whole country. More>>

ALSO:

Statistics: NZ Jobless Rate Falls To 5.1% Under New Methodology

New Zealand's unemployment rate fell more than expected in the second quarter as Statistics New Zealand adopted a new way of measuring the labour market to bring the country in line with international practices, and while a growing economy continued to support jobs growth. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news