A bidding group of Archer Capital, Peter Hutson and James Reeves has withdrawn a proposed takeover for Abano Healthcare after an independent valuer said the target's shares were worth more and the board refused to allow the group due diligence.
The Archer-led group blamed its withdrawal on the healthcare investor's earnings downgrade given at its annual meeting this week. Abano forecast both weaker sales and pretax earnings for its first half, citing soft economic conditions in Australia.
"It is disappointing to learn of a second downgrade in only eight months, and to have this information produced and downplayed without warning at the AGM," Reeves said in the statement.
"There are also serious concerns about the company's governance which were reinforced by the timing and poor quality of the information presented to shareholders," he said, adding that the board had repeatedly distorted and delayed market sensitive information.
Abano this week released a valuation from Grant Samuel of $8.30 to $10.05 a share for 100 percent of the company, trumping the bidding group's last proposed price of $7.80 a share. Chairman Trevor Janes told shareholders that the Archer group's proposed scheme of arrangement had been "a major distraction", was opportunistic and undervalued the company.
