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Masthead Portfolios says it will not be further raising or extending its offer for healthcare company Abano.
Masthead originally offered $3.85 a share in a bid to take its 19.9 per cent stake to 51 per cent, then later raised the offer to $5. It also extended the closing date for the offer to December 10.
The offer has been rejected by Abano's board which said it was too low. An independent report by Ferrier Hodgson identified a value range of $5 to $5.80 for Abano shares with a mid point of $5.40, for full ownership of the company.
Today Masthead said it was advising the market that it would not be making any further extension to the closing date of its final $5 per share offer.
Masthead's Mark Stewart said informal feedback from various parties gave Masthead a high level of confidence its offer would be successful.
He expected the bid to go down to the wire as larger shareholders tended to accept on the last day, he said.
Many shareholders would have paid prices for their shares well below $5, with some looking at more than fourfold gains.
"Taking a profit now must be attractive for them given the real risks that Abano faces in achieving its bullish earnings targets over the next five years," Mr Stewart said.
Abano had been in play for more than two months and despite efforts by its board no alternative offers had emerged.
As a 20 per cent shareholder in Abano, Masthead had been concerned about the apparent ease at which Abano had allowed parties to do due diligence, he said.
"In particular, we are unhappy that a competitor, that the Abano board stated was only interested in part of the business, was allowed into the process."
Last week Abano directors said that while a potential bidder had withdrawn, other parties remained interested.
The unnamed party that withdrew was interested mainly in Abano's New Zealand audiology business, and its suggested offer price was at the bottom end of the independent valuation range.
After putting forward an incomplete and conditional offer, the party had suggested an alternative plan to buy Abano's audiology business, Abano chairwoman Alison Paterson said.
The board was taking advice on that plan, along with all other options.
Abano shares were unchanged at $4.80 at mid-morning today.
- NZPA
