Hospital takeover bid gets greenlight

Connor Healthcare spokesman Mark Stewart, FOTOPRESS/Michael Brad

NZX-listed Acurity Health has recommended shareholders accept a takeover bid for the company after the offer was lifted to $7.25 a share.

Connor Healthcare was previously offering $6.50 a share for all the remaining shares in the company that operates three private hospitals in Wellington and Hastings.

Connor was established by Acurity's major shareholders -- the Stewart family, Royston Hospital Trust Board and Evolution Healthcare -- who jointly own 70.8 per cent of the listed healthcare provider.

The $7.25 offer price represents a 38 per cent premium to Acurity's share price at market close on the day before Connor's announced of its intention to make the offer.

Shares were unchanged at $6.65 just before 3pm today.

Acurity said its independent directors had given shareholders a unanimous recommendation to accept the offer unless a higher bid emerges.

"Shareholders should wait to receive, and then carefully read, the target company statement and independent adviser's report before making a decision whether to accept the offer," Acurity said.

Connor spokesman Mark Stewart said the offer price was attractive for Acurity shareholders who had seen "meagre returns" over the last four years.

"We believe that the lack of liquidity in the shares, the required capital expenditure on Wakefield hospital, the costs associated with the NZX listing and the lack of scale and institutional shareholder support means that Acurity is best suited to being an unlisted private company," Stewart said.

Connor said $60 million was required to rebuild Wellington's Wakefield hospital to meet earthquake requirements and upgrade the Wakefield Medical Consultant Centre.

The takeover offer, which opened today, requires 90 per cent minimum acceptance and approvals from the Overseas Investment Office and Commerce Commission.