KEY POINTS:
The Stewart family has sold its 19.9 per cent Abano stake at a hefty profit to a firm associated with Abano's partners in its Bay Audiology division in a move that probably shuts out Crescent Capital Partners' bid for 100 per cent of the company.
The Stewart family's investment vehicle, Masthead, sold its stake to Healthcare Industry at $5.20 a share.
Healthcare Industry is 70 per cent owned by Peter Hutson, the founder of Abano's Bay Audiology Division. His family still owns 30 per cent of Bay Audiology, which accounts for about 36 per cent of Abano's revenue.
Masthead bought into Abano at $1.55 a share just over a year ago and stands to make a profit of about $17 million on its original investment.
Masthead's Mark Stewart said the price exceeded Masthead's value parameters.
"We like the industry and had viewed this as a long-term investment, however, the price offered was very attractive in the current environment."
Healthcare Industry's acquisition throws a spanner in the works of Australian private equity firm Crescent's $5.20-a-share offer which is conditional on 90 per cent acceptances.
It has already achieved a 19.9 per cent stake via on and off market purchases.
But Abano's board has advised shareholders not to accept, arguing the offer is at the lower end of an independent valuation range. The focus has also come on Crescent's intentions regarding the Bay Audiology business and its ambitious Australian and Asian expansion plans.
This month Abano chief financial officer Richard Keys told the Business Herald his company was concerned about what Crescent would do with the Australian part of the business should its takeover offer succeed.
"In the press they have said they will discontinue Australian expansion - we can understand why - they own a business which competes with us in Australia. Our concern is if they end up as a 51 per cent shareholder the remaining shareholders in Abano wouldn't benefit from the strategy we have put in place."
Yesterday he said he presumed the Healthcare Industry acquisition "has put a major blow into Crescent", although if he was happy with that outcome, he was unwilling to show it.
"They are a shareholder and I respect any shareholder in Abano."
Furthermore, despite Abano's partnership with Healthcare Industry in Bay Audiology, there had been no consultation with Hutson before his acquisition and Abano's board provided him with no advice.
Abano chairman Alison Paterson said: "You can see this purchase as people who believe in the strategy which they've helped to deliver, excited in particular I think by the plans for Australia and Asia. They had some interest themselves in protecting their vision I guess."
Paterson declined to say whether she and the board were pleased with the Healthcare Industry acquisition although she did say: "The assumption would have to be that Healthcare Industry have purchased to hold, and stability in a cornerstone shareholder is pretty important."
Abano shares closed down 10c at $4.90 yesterday.
