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.


© Scoop Media

Business Headlines | Sci-Tech Headlines


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>>


Sweet Health: Sugary Drinks Banned From Hospitals And Health Boards

All hospitals and DHBs are expected to kick sugary drinks out of their premises. University of Auckland researcher, Dr Gerhard Sundborn who also heads public health advocacy group “FIZZ”, says he welcomes the initiative. More>>


NASA: Evidence Of Liquid Water On Today's Mars

Using an imaging spectrometer on MRO, researchers detected signatures of hydrated minerals on slopes where mysterious streaks are seen on the Red Planet. These darkish streaks appear to ebb and flow over time. More>>


Bird Brains: Robins Can Just Be Generally Clever

Research from Victoria University of Wellington has revealed that birds may possess a ‘general intelligence’ similar to humans, with some individuals able to excel in multiple cognitive tests. More>>


Psa-V: Positive Result On Whangarei Kiwifruit Orchard

Kiwifruit Vine Health (KVH) has received a Psa-V positive test result on Hort16A and male vines on a kiwifruit orchard in Whangarei. This is the first confirmed case of Psa-V on an orchard in the Whangarei region. More>>

Regional Accents: Are Microbes The Key To Geographical Differences In Wine?

A new study of six of New Zealand’s major wine-growing regions has found that differences in flavour and aroma of wine from different areas may depend more on microbes than was previously thought. More>>


Science: AgResearch To Cut Science Staff In Areas Of 'Reduced Demand'

“We are therefore consulting with our staff from today on a proposal to reduce science staff in areas of shrinking demand. Combined with recruitment planned in areas of growing demand, this would mean a net reduction of 15 scientists and 41 technicians at AgResearch in the 2015/16 year." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news