Acurity Directors Support Sweetened Takeover Offer
NZX and Media Release
26 August 2014
Acurity Directors Unanimously Support Sweetened Takeover Offer
Connor Healthcare Limited (Connor) today advised that it had increased its takeover offer for Acurity to $7.25 per share from $6.50 per share.
The offer, which is 38% above the closing price of Acurity shares on the 25th of July when takeover offer was announced, falls well within the Independent Adviser’s valuation range released today along with the Target Company Statement. Importantly, it has the unanimous support of the Independent Directors of Acurity, who have indicated that they will accept the Connor offer, in the absence of a higher value alternative proposal.
Connor is a company jointly established by the two principal shareholders in Acurity, which together own 70.77% of the shares in the NZX listed private hospital operator.
Connor’s spokesman Mark Stewart said: “We are very pleased that Acurity’s Independent Directors have unanimously endorsed our revised offer. It was important for us to get their support as they fully understand the factors that influence the value of the Company.
“We believe the offer price to be very attractive to shareholders who have seen meagre total returns over the last four years. We believe that the lack of liquidity in the shares, the required capital expenditure on Wakefield hospital, the costs associated with the NZX listing and the lack of scale and institutional shareholder support means that Acurity is best suited to being an unlisted private company.”
Acurity recently indicated that it expected to spend between $45 million and $50 million to rebuild its flagship Wakefield hospital to meet earthquake code requirements. This capital expenditure represents between $2.00 and $3.00 per share to maintain the existing capacity at the hospital. A further $10 million is required to upgrade the current Wakefield Medical Consultant Centre taking the total estimated capital expenditure required to $60 million.
The takeover offer, which opens today, is subject to conditions including a 90% minimum acceptance condition and approvals from the Overseas Investment Office and the Commerce Commission.
About Connor Healthcare
Connor Healthcare is a company established by two existing shareholders in Acurity: Austron Limited and Sydney-based Evolution Healthcare (NZ) Pty Limited (which will own 25% of Connor on completion of the takeover).
Austron is an incorporated joint venture between the Royston Hospital Trust Board and interests associated with the Stewart Family of Christchurch.
Evolution is a leading provider of healthcare services in Australia and New Zealand. Evolution’s focus is to invest in private healthcare facilities, attract and train the best staff and partner with leading healthcare providers to offer patients excellence in healthcare. Evolution separately owns and operates Shellharbour Private, South Coast Private, Boulcott, Canberra Private and Waratah Private hospitals.