Abano shares at four-month high amid prospect of takeover bid
The specialty health clinic investor says it has batted away an unsolicited proposal and now faces a potential takeover bid.
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Shares in Abano Healthcare climbed to a four-month high after the specialty health clinic investor said it had batted away an unsolicited proposal from an unnamed party alongside director Peter Hutson and now faces a potential takeover bid.
The stock jumped 11 percent to $6.51 after the Auckland-based company said it received and rejected an unsolicited non-binding indicative offer north of $100 million from a third party seeking to invest and operate in the Australasian dental sector. That values Abano at $111.3 million.
"There's a lot of growth in the business and we are supportive of the board and management team," says Shane Solly, portfolio manager at Mint Asset Management, which holds shares in Abano. The bidders "have got a tough job to offer up a better proposal".
The proposal was presented in conjunction with Mr Hutson, who owns about 14 percent of Abano, and sought an exclusive and confidential period of due diligence from Abano and unanimous board approval.
Abano turned down the offer saying it did not offer anything unique and that the indicative price "while above current market prices" did not reflect the company's value and wasn't close to a level warranting exclusivity.
"If the third party didn't see growth, they wouldn't be interested in our business," chief financial officer Richard Keys told BusinessDesk.
He says another reason behind the board's decision was because of the scheme of arrangement structure, which would leave Abano covering the cost of the due diligence and would only require 75 percent shareholder approval, rather than the 90 percent threshold needed in a takeover.
"The board was not willing to co-operate on the basis requested."
Abano wanted to notify shareholders about the bid to raise $15 million via a small placement and share purchase plan, he says.
(BusinessDesk)
Paul McBeth
Wed, 11 Jul 2018
Wed, 11 Jul 2018
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Abano shares at four-month high amid prospect of takeover bid
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