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

 

Media: Fairfax Moves To Create Modern Newsroom

Fairfax Media New Zealand continues its newsroom transformation this week, with a proposal to further organise its editorial operations into focused, local teams and specialist national topic areas. More>>

ALSO:

Dairy: Fonterra Forecast For 2015/16 Season

Fonterra Co-operative Group Limited has today reduced its forecast Farmgate Milk Price for the 2014/15 season to $4.40 per kgMS. Along with its previously announced forecast dividend range of 20-30 cents per share, the change amounts to a forecast ... More>>

ALSO:

BusinessDesk: SkyCity Lifts Minimum Convention Centre Investment To $430M

SkyCity Entertainment Group, the casino operator, has lifted the minimum it will invest in the Auckland International Convention Centre to $430 million and said total costs including land may be $450 million to $470 million. More>>

Statistics: Drop In Dairy Prices Leads Fall In Exports

Total goods exports fell $240 million (5.5 percent) to $4.2 billion in April 2015 compared with April 2014, Statistics New Zealand said today. More>>

BusinessDesk: APN's NZME Sees Future In Paywalls, Growth In Digital Sales

APN News & Media has touted a single newsroom concept for its NZME unit in New Zealand, similar to what Germany's Die Welt uses, saying an 'integrated sales proposition' is helping it win market share, including ... More>>

Labour Party: Global Milk Prices Now Lowest In 6 Years

The latest fall in the global dairy price has brought it to the lowest level in six years and shows there must be meaningful action in tomorrow’s Budget to diversify the economy, says Labour’s Finance spokesperson Grant Robertson. “Dairy prices ... More>>


BusinessDesk: NZ Inflation Expectations Creep Higher In June Survey

May 19 (BusinessDesk) - New Zealand businesses lifted their expectations for inflation over the next two years, sapping any immediate pressure on the Reserve Bank to cut interest rates, and prompting the kiwi dollar to jump higher. More>>

BusinessDesk: Lower Fuel Costs Drive Down NZ Producer Input, Output Prices

May 19 - Producer input and output prices fell in the first quarter, mainly reflecting lower fuel costs and weakness in prices of meat and dairy products. More>>

Media: Fairfax Media NZ Announces Senior Editorial Team

Fairfax Media New Zealand has today confirmed its new editorial leadership team, as part of a transformation of its newsrooms aimed at enhancing local and national journalism across digital and print. More>>

Science: Flavonoids Reduce Cold And Cough Risk

Flavonoids reduce cold and cough risk Research from the University of Auckland shows eating flavonoids – found in green tea, apples, blueberries, cocoa, red wine and onions – can significantly reduce the risk of catching colds and coughs. The research, ... More>>

BusinessDesk: RBNZ House Alert Speech The Catalyst For Government Action

Prime Minister John Key all but conceded that pressure from the Reserve Bank of New Zealand for concerted action on rampant Auckland house prices was one of the main catalysts for the government's weekend announcements about tightly ... More>>

BusinessDesk: How To Fall Foul Of The New Housing Tax Rules: Tips From IRD

Just because you rented out your investment property doesn't absolve you from paying tax, says the Inland Revenue Department in a summary of commonly made mistakes by non-professional property investors when it comes to their tax liability.More>>

Legal: Superdiversity Law, Policy And Business Stocktake Announced

Mai Chen, Managing Partner at Chen Palmer New Zealand Public and Employment Law Specialists and Adjunct Professor of Law at the University of Auckland, today announced the establishment ... More>>

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news