Abano Healthcare Group will sue its biggest shareholder Healthcare Partners Holdings for unpaid costs stemming from the investor's latest attempt to wrest control of the medical services investor.
The Auckland-based company today kicked off legal proceedings in the High Court over $566,000 in unpaid costs arising from Healthcare's failed partial takeover bid, having incurred a $1 million bill over the tilt, it said in a statement. Abano offset those costs by withholding an interim dividend due to Healthcare of some $650,000 in January, and Healthcare's complaint to NZX was unsuccessful.
"The failed partial takeover attempt by Healthcare Partners was time consuming, costly and a distraction for Abano," chairman Trevor Janes said. "We do not see it as reasonable for Abano and its shareholders to be funding costs properly incurred in relation to Healthcare Partners unsolicited and unsuccessful bid."
Healthcare, the entity used by Peter and Anya Hutson and James Reeves, wanted to lift its stake to 50.01 percent from 19.02 percent, with a $10.16 a share offer, including the 16 cents per share interim dividend, but only attracted 3.6 percent. The group wanted to improve the company's performance by halting acquisitions in the medium term in order to reduce debt, while improving the dental practices' operations. They would also have installed three new directors.
Peter Hutson and Reeves have been lobbying for change at Abano for several years, supporting an informal takeover bid in 2013 by Archer Capital at $6.97 a share, which would have seen the Australian private equity firm take the healthcare investor's dental businesses and hand the audiology units to Hutson for a nominal sum.
The offer was turned down by the Abano board as being too low. Archer was refused due diligence access because it could become a direct competitor to Abano, and Peter Hutson left the board, and the Hutsons later bought out Abano's stake in the audiology business.
Peter Hutson and Reeves later tried to oust Abano chairman Trevor Janes, calling a special meeting of shareholders, though the resolution was voted down, and they unsuccessfully opposed Janes' re-election at the company's latest annual meeting.
Abano said it has incurred $2 million over the past three and a half years from the Hutsons' and Reeves' machinations, and that the group's baulking at paying those costs was a continuation of their efforts to "delay and avoid their financial responsibilities under the Takeovers Code".
The shares recently traded at $8.56, and have gained 1.9 percent so far this year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- CBA's Vittoria Shortt to take up ASB reins in February
- Adern's father named as new administrator for Tokelau
- Is New Zealand’s electricity regulation fit for purpose?
- Rocket Lab delays second test launch until early 2018
- Brisbane winter flights, capital's new Queenstown service and Singapore's chatbot
Most listened to
- REAA CEO Kevin Lampen-Smith says the rules and regulations are adequate to ensure safety requirements are met
- Why good education trumps regulation for drone (UAV) use, with Airways' Tim Boyle
- Tim Hunter wonders how the subsidy system will cope when the fees-free policy kicks in
- Fat Prophets' Greg Smith discusses this week's highs and lows
- Matthew Hooton it's time the old faces departed National
- NBR Radio: The best interviews, with Grant Walker – updated daily