KEY POINTS:
Abano Healthcare Group yesterday spurned a second partial takeover bid by Masthead Portfolios, saying the offer was still too low.
Abano Healthcare Group chairwoman Alison Paterson said the company's advice to shareholders at the annual meeting in Auckland today would be, "don't sell".
Masthead is offering $5 a share for 51 per cent of the company, $1.15 a share higher than its previous offer of $3.85 in September.
"[Shareholders] only get one chance to get a premium. If they sell part of their holding it's likely the rest of their holdings will be discounted when they go to sell later," Paterson said.
She said the revised offer was at the lowest end of the independent valuation by Ferrier Hodgson in October which valued Abano at between $5 and $5.80 a share for 100 per cent of the company.
The report was backed up by research notes from ABN AMRO Craigs, which values the stock at $5.18, and Forsyth Barr which prices the stock at $5.65 a share.
Paterson said three other parties had signed due diligence agreements with Abano, and the board was still in discussions with "other parties".
Masthead director Mark Stewart said Abano's rejection was "not altogether a surprise', but he was disappointed that its revised offer was "quickly rejected" by the board.
"Despite the comments by the board we will press on and let the shareholders assess the merits of our offer," he said. "
Major Abano shareholders were also cold on Masthead's latest offer. Andrew Crouch, whose investment company Salvus owns a 5.7 per cent stake, said the $5 a share offer was at the bottom end of the range. He considered Abano to "have good growth prospects".
Stuart Burns, director of Abano's second largest shareholder, the Rotorua Energy Charitable Trust, said the trust was happy with the Abano board's performance and "had yet to be convinced that Masthead would bring any additional skills to the company".
He said the trust, which last month increased its stake, would be more likely to look at a full takeover.
Masthead, which is Abano's biggest shareholder, wants to increase its 19.9 per cent stake to 51 per cent to become majority shareholder. The closing date for the offer is November 29.
Since Masthead acquired its stake in October last year, Abano shares have risen steadily, backed by a solid performance from recent acquisitions in its diagnostics, dental and audiology sectors.
Shares in Abano closed up 3.5c at $5.
The bid
* Masthead Portfolios has offered $5 a share for a 51 per cent of Abano Healthcare Group.
* Abano rejects the offer.
* Major shareholders also say the offer is too low.
