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

 


UPDATE: Acurity shareholders launch all-cash takeover bid

UPDATE: Major Acurity shareholders launch all-cash takeover bid

(Adds Mark Stewart comment, share price)

By Paul McBeth

July 28 (BusinessDesk) - The three biggest shareholders of Acurity Health Group have launched a cash takeover bid for the 29 percent they don't own, valuing the private hospital operator at $112.2 million, saying the firm faces a big struggle lifting its flagship Wellington hospital up to earthquake code. The shares rose to the offer price.

Connor Healthcare, an entity set up by principal shareholders the Stewart family, Royston Hospital Trust Board, and Evolution Healthcare, are offering $6.50 a share for the rest of Acurity, a 24 percent premium to Friday's closing price of $5.25, the company said in a statement.

Connor spokesman Mark Stewart, whose family interests have bought and sold stakes in Ebos Group and Abano Healthcare Group, told BusinessDesk the cost of maintaining a listing and providing funders with insight into its margins didn't suit the business.

"It's a pretty difficult environment out there - Southern Cross is one of the major funders under its own pressure," Stewart said. "They're trying to continue their business at much lower prices and we're squeezed in the private hospital sector - surgeons are the ones effectively getting the money."

Connor anticipates being better able to absorb the estimated $50 million in capital expenditure needs to upgrade the Wakefield hospital in Wellington, before expanding the business to latch on to New Zealand's ageing demographic which will likely need increased spending on health.

In its long-term fiscal sustainability report, the Treasury predicts health spending to progressively rise to 10.8 percent of gross domestic product by 2060. The government department says the country will need to make choices as to what is publicly provided as that cost balloons with an ageing population, and new and more expensive technology extending life expectancies.

Stewart said that expansion could come from buying more hospitals, or partnering with surgeons or funders.

"The conclusion I've come to in healthcare is that partnerships are the way to get going," he said.

Stewart said New Zealand's health sector is about 10 years behind Australia, and Acurity will look to draw on Evolution's experience across the Tasman.

Sydney-based Evolution bought an 11 percent stake in Acurity last year, paying $5.50 a share, and also owns Boulcott hospital in Hutt City. The Stewart family and Royston launched a successful partial takeover in 2012 at $6 a share.

The takeover offer is expected to be sent to shareholders on Aug. 26, and will need minimum acceptances of 90 percent to allow Connor to exert the mop-up provisions. The deal will also be subject to approval from the Overseas Investment Office.

The shares climbed 24 percent to $6.50 on Friday, having decreased 3.5 percent this year. The company has net tangible assets per share of $5.368, according to NZX data.

In May, Acurity beat guidance as it boosted annual profit 55 percent, and said it anticipated growth in public sector funding due to capacity constraints for elective surgery in state-run hospitals.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

ICT Innovation: Six NZ Finalists In World Summit Awards

The awards are a global showcase of 40 projects, across eight categories, with a special emphasis on those which show the benefits of information and communication technology for the development of communities. New Zealand has finalists in six of the eight categories. More>>

ALSO:

Final Frontier: Rocket Lab And NASA Sign Commercial Space Launch Agreement

Rocket Lab has signed a Commercial Space Launch Act Agreement with the National Aeronautics and Space Administration (NASA). The agreement enables Rocket Lab to use NASA resources - including personnel, facilities and equipment - for launch and reentry efforts. More>>

ALSO:

Scoop Business: Wheeler Downplays Scope For ‘Large’ Rates Fall

Reserve Bank governor Graeme Wheeler says some market commentators are predicting further declines in interest rates that would only make sense for an economy in recession, although some easing is likely to be needed to maintain New Zealand’s economic growth. More>>

ALSO:

Ruataniwha Dam: Consent Conditions Could Mean Reduced Intensity

Legal advice sought by the Hawke’s Bay Regional Council on the Ruataniwha Dam consent conditions has confirmed that farmers who sign up to take water from the dam could be required to reduce the intensity of their farming operation to meet the catchment’s strict nitrogen limit. More>>

Health And Safety: Bill Now Sees Rules Relaxed For Small Businesses

Health and safety law reform sparked by the Pike River coalmine disaster has been reported back from the industrial relations select committee with weakened requirements on small businesses to appoint health and safety representatives and committees. More>>

ALSO:

Bearing Fruit: Annual Fruit Exports Hit $2 Billion For First Time

The value of fruit exported rose 20 percent (up $330 million) for the June 2015 year when compared with the year ended June 2014. Both higher prices and a greater quantity of exports (up 9.0 percent) contributed to the overall rise. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news