Abano shareholder lobbied directors in bid to oust chairman Janes, letter shows
Abano Healthcare's [NZX: ABA] biggest shareholder and former director Peter Hutson lobbied directors as early as last August to support the removal of chairman Trevor Janes and change strategy at the health clinic investor, according to a letter sent to Janes.
Healthcare Industry Ltd and Steamboat Capital, the entities representing Hutson and fellow rebel shareholder James Reeves, have given Abano until tomorrow to respond to a request for a shareholders' meeting to re-run the vote on Janes' re-election last November.
Hutson, Reeves and Archer Capital were rebuffed in an attempted takeover of the company and in turn this week rejected a $12.9 million cash offer from Abano yesterday to buy out the 50 percent of Bay International that Hutson owns.
Hutson held "at length one-on-one" discussions with the company's non-executive directors in August last year where he "expressed my concerns about the company's directions," and the attempted Archer Capital-backed takeover would have been "a diplomatic solution to the problem," he said in a letter to Janes on April 10.
The letter says he went public with his concerns in September, and since the aborted takeover had approached deputy chair Susan Paterson "seeking to discuss continuing underperformance and rapidly deteriorating standards of corporate governance." He had wanted to "discuss the state of the company and specifically your position."
Hutson released the letter in response to Abano's April 10 statement "that Hutson/Reeves continue to refuse to engage with the board, despite numerous invitations to meet with the full Abano board and/or board representatives."
Hutson said he repeatedly sought to meet with Paterson, but without success.
"It represents a new low in Abano's ethics for which Mr Janes is accountable," Hutson said in a statement.
Abano, and Janes himself, have ruled out a re-run of the vote, and at this stage, Hutson and Reeves have only called for the meeting without starting the process required for a meeting to be held.
An extraordinary general meeting can be called at the request of 5 percent of a company's shareholders, which the pair's 19 percent stake exceeds. They have nominated May 27 for a shareholders' meeting.
Hutson quit Abano's board last September after the company questioned his ability to remain a director while mounting a takeover for the business. The takeover bid was pitched as high as $7.80 a share, but rejected, relying in part on a report by investment house Grant Samuel, which Hutson and Reeves says gave an inflated valuation.
They issued an alternative valuation report from KordaMentha, which valued Hutson's Bay Audiology stake at between $6.3 million and $9.4 million, compared with the $12.9 million cash offer made by Abano.
Hutson said yesterday's offer to buy him out illustrated what was wrong with the company.
"They think they can solve their problems by buying things with shareholders' money," he said. "They need to fix what they have, not engage in attempts to change the subject to deflect attention from the company's poor dental performance."
The shares were unchanged at $6.40 today, and have edged up 0.5 percent this year.