Abano board questions Hutson’s conflict of interest in takeover bid
Abano Healthcare's [NZX: ABA] board is taking advice on Peter Hutson's ability to keep his directorship of the specialist healthcare investor while taking part in a $131.4 million takeover tilt with Australian private equity firm Archer Capital.
Substantial shareholder notices today show Archer Capital, Hutson and James Reeves hold about 19.99 percent of Abano's shares, and are locked up in a standstill arrangement for the next five months to allow the takeover attempt. Hutson's fiduciary duties as an Abano director trump any conflicting obligations of the associated shareholding deal, according to their statements.
"The board is seeking advice on, and is concerned as to the practical implications of the arrangements on both Mr Hutson's ability to effectively discharge his duties as a director of Abano given his various conflicts of interest and the board's confidence that he can realistically achieve these requirements," chairman Trevor Janes said in a statement.
Archer and Hutson last Friday "re-activated" an unsolicited proposal first made, and rejected, last month to acquire Abano, trimming the indicative price that would be offered to $6.97 a share from $7.14, to reflect dividend payments and capital raising. As part of the deal, an Archer-owned Abano would sell its audiology business, for a nominal sum, to Hutson's interests.
Hutson has an interest in about 14 percent of Abano and has been a co-investor with the company in its international ventures. He was a founder of Bay Audiology, which Abano took control of in 2005 and exited his stake with Abano when Bay Audiology was sold for a profit in 2009 to buyout firm Crescent Partners.
The shares were unchanged at $6.70 today, having traded at $5.86 before the takeover bid was made public in August.