Abano gets shareholder nod for ElderCare sale

Abano has gained shareholder approval for the sale of its ElderCare business, advancing its plans for a $10 million shareholder payout and clearing the way for its acquisition of the country's biggest audiology business.

Abano said its shareholders today voted in favour of the sale of the aged care business, ElderCare, to The Macquarie Group for $63.5 million, with settlement is planned due for July 13.

The vote also gives Abano the green light for the $21 million purchase of a 70 per cent stake in Bay Audiology.

Abano chairman Jim Syme said the company, as previously announced would make a one-off $10m cash return to shareholders following settlement of the sale.

"We are pleased to confirm that the capital return, by way of an off market, voluntary, pro rata share buyback, is due to commence within the next month", he said.

"Details of the pro-rata percentages and buyback price will be announced in the next few weeks, and an offer document will be sent to all shareholders.

The share buyback was still conditional upon Inland Revenue Department approval and minimum threshold shareholder acceptances, Mr Syme said.

Abano also announced today it entered the audiology sector, having signed a conditional agreement to invest in Bay Audiology Ltd, New Zealand's largest audiology service provider.

Abano said following the $21 million purchase of a 70 per cent shareholding, the remaining 30 per cent would continue to be held by Bay's three founding clinical directors.

After a five year period, Abano would have the ability to acquire their shareholdings based on a pre-determined price formula related to the company's future earnings.

The deal had been conditional on the ElderCare sale gaining shareholder approval today.

The Bay Audiology sale also requires shareholder approval which will be sought at Abano's annual meeting, to be held in September.

The Bay Audiology transaction is expected to be completed in early October.

Mr Syme said Abano's full year revenue would be at the upper end of the $65m to $66m guidance issued in May, while ebitda (earnings before interest, tax, depreciation and amortisation) would be at the higher end of $7.2 to $7.5 million.

Mr Syme said the company expected to post a small bottom line loss.

Abano shares were up 7c to 173 in late morning trade today.

- NZPA