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

 

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