4 Nov 2016

Hostile takeover looms for Abano Healthcare

7:12 pm on 4 November 2016

A potentially hostile takeover bid for Abano Healthcare has emerged from its major shareholder.

Abano Healthcare chairman Trevor Janes.

Abano Healthcare chairman Trevor Janes Photo: Abano Healthcare

Peter Hutson and interests associated with him, who already own just over 19 percent of Abano, want to buy another 31 percent to give them a majority stake. They've offered $10 a share, which is 26 percent above Abano's closing price on 3 November.

The offer renews Mr Hutson's three-year battle with the company, which he unsuccessfully tried to take over in 2013, which resulted in him being forced off the Abano board of directors.

Abano sold its share in an audiology business to Mr Hutson earlier this year, and it has since concentrated on buying dental practices, which trade under the Lumino brand in New Zealand and the Maven brand in Australia.

Mr Hutson said Abano has been underperforming, was not earning enough from the dental practices, and has tripled its debt level.

"As a consequence, we consider this to have been value destructive for shareholders. Pursuing further acquisitions will not remove this problem," he said in a statement to shareholders.

Abano's shareprice jumped 14 percent to $9 after the offer, albeit on a small number of shares being traded. So far this year the stock has risen 3.5 percent compared with a 6.4 percent gain for the benchmark NZX 50 index.

Mr Hutson tried a contentious backdoor takeover in 2013, which was strongly rebuffed by the then board.

At Abano's annual meeting last week, Mr Hutson voted against the reappointment of the company chairman, Trevor Janes, and abstained on the re-election of two others.

The takeover offer is the second assault on a perceived market underachiever in a week.

Last week fund manager Augusta Capital launched a bid to take control of listed property trust NPT.

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