Masthead Portfolios Cash Offer

News Release

Masthead Portfolios Cash Offer for Abano Healthcare Opens

10 October 2007 – Masthead Portfolios Ltd advises that its partial takeover offer to all shareholders in Abano Healthcare Group Ltd opens today.

The $3.85 a share cash offer is open for 30 days following today’s offer date. Masthead, which currently owns 19.9 per cent of the shares on issue in Abano, is seeking to increase its holding to 51 per cent. As required by the Takeovers Code, the offer is conditional on achieving sufficient acceptances to take Masthead’s shareholding to more than 50 per cent.

Masthead director Mark Stewart said based on the information available the $3.85 a share offer fairly values Abano. At the time the notice of offer was delivered on the 13th of September 2007 the offer represented a:

 208% premium to the Abano price of $1.25 on 10th October 2006
 71.1% premium to the 12 month average Abano price of $2.25
 13.6% premium to Abano’s last closing price of $3.39

Mr Stewart acknowledged that the Abano share price had risen sharply following the announcement by Abano early in the week that its earnings outlook had improved and that other parties had expressed interest in the company.

“As the largest shareholder in Abano we have a strong commercial interest in any outcome. We are not adverse to any share value appreciation if it is justifiable and sustainable. But it would appear that there is a significant speculative element to the increase and query how meaningful the price rise is given the light trading volumes. Moreover, whilst other parties may have stated an interest in Abano there is no certainty that a competing buyer will emerge and then be successful.

“We believe that Abano is a good company and are keen to see the Independent Adviser’s report on the merits of the offer. We have also contacted Abano to make it clear that Masthead expects to be provided the same information as is provided to any other prospective buyer.”

Mr Stewart noted that Masthead’s price was real and on the table. Masthead had a strong investment track record and said that if Masthead was to be successful in moving to a majority shareholding in Abano, it could use this experience to further complement Abano’s existing skills.

ENDS

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