The Shareholders Association is laying down the gauntlet ahead of Abano Healthcare’s [NZX: ABA] annual meeting tomorrow amid the prospect of hostile takeover activity.
NZSA chairman John Hawkins has put former Abano director Peter Hutson and associated parties on notice that they need to be more transparent with their interest in acquiring the company.
Abano’s board has challenged a proposal by Mr Hutson and associate James Reeves, backed by private equity firm Archer Capital, to acquire the 80% of Abano shares they don’t already hold between them.
Mr Hawkins says Abano’s directors have made it clear they consider the unsolicited, indicative offer of $6.97-$7.14 a share as totally inadequate, however shareholders currently have had no input to the process.
Regardless of the merits of the Archer/Hutson proposal, NZSA is very concerned that it has not been progressed down the pathway set out in the Takeovers Code, he says.
“Should an attempt be made at the AGM by Archer/Hutson representatives to introduce any matters to the meeting with regard to this takeover offer, it would be the association’s intention to vote in a way that maintains the current ownership,” he says.
“If the opportunity arises, we will also advise Mr Hutson and his associates that should they want to pursue their proposal, the appropriate process is to make an offer using the procedures outlined in the Takeovers Code."
The Archer/Hutson group has requested a period of due diligence without having lodged a formal offer. Abano’s board has declined the request, saying Archer may end up as a competitor.
Mr Hutson resigned as a director of Abano in September, on the urging of other board members, because of a perceived conflict of interest.
Mr Hawkins says the association intends to vote undirected proxies it holds in favour of all resolutions including the re-election of existing directors and an increase in fees.
Abano is seeking an increase in discretionary funds available to remunerate directors for extra work done such as defending takeover offers.