Abano directors reiterate rejection of Healthcare Partners offer

The board of Abano Healthcare reiterates shareholders should reject a takeover offer, saying it had gained no traction and the share price would drop if it was successful.

Healthcare Partners, an entity owned by what the board has described as "dissident shareholders" Anya and Peter Hutson and James Reeves, held about 19% of Abano's stock when it mounted a $10-per-share offer for 50.01% of the healthcare company.

The Hutsons and Mr Reeves say they would halt acquisitions in the medium term in order to reduce debt, and would install three new directors. Since mounting the bid, Healthcare Partners has attracted acceptances totalling about 1% of Abano's shares, with the offer due to close on March 3.

"All of Abano's major institutional shareholders, and retail investors we've spoken to, have informed us they support the board's position to reject the partial takeover offer," the directors say in a letter to shareholders.

"Two large independent broking firms also advise they agree with the Abano board's recommendation. Abano's directors and senior management intend to reject Healthcare Partners' offer in respect of all the Abano shares they hold or control. If this changes, we will advise you."

The directors say because the offer is partial, shareholders would likely be left with the majority of their shares if it is successful, but with the company "controlled by Healthcare Partners whose strategy for Abano is unproven and unclear." The board believes the value of the shares will fall and shareholders' ability to sell them at a fair price will be significantly reduced, it says.

Healthcare Partners has hired an Australian call centre to contact shareholders, the board said. The call centre is a related entity of Abano's share register Computershare, causing some shareholder confusion, but the approach was not approved or authorised by Abano, the directors told shareholders.

The directors say the company's results from December 16 had been above expectations, and re-affirmed annual earnings guidance from the Grant Samuel independent advisors report, projecting profit of $10.2 million on revenue of $236.2 million in 2017.

Abano paid a 16c per share interim dividend in January, except to Healthcare Partners, using their dividend to offset $700,000 in unpaid invoices related to the takeover bid. As part of the takeover bid, Healthcare Partners refused to allow Abano's usual dividend reinvestment plan, and the company says its directors have been buying shares on-market with the dividends they received from their respective shareholdings.

Abano shares last traded at $9, and have gained 29% over the past 12 months.

(BusinessDesk)