KEY POINTS:
Abano Healthcare Group directors have unanimously recommended shareholders reject a partial takeover offer from Masthead Portfolios.
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.
That was 40 per cent above the Masthead offer of $3.85 for control of the company, Abano said.
Masthead, the investment company of Christchurch's Stewart family, already owned 19.9 per cent of Abano when it announced it was seeking to lift its shareholding to 51 per cent.
Along with the independent appraisal report, Abano also released a target company statement today, with chairman Alison Paterson saying the Masthead partial offer was "simply inadequate".
In a letter to shareholders she said the board believed the Masthead offer had no merits.
The independent adviser could not find any compelling reasons why shareholders should accept the offer, and was of the opinion that Abano was "poised for continued significant growth".
Abano had also received approaches from other parties, but shareholders accepting the Masthead offer would lock up their shares and may not be able to accept any alternative higher offer that may be made.
Ms Paterson said Abano has successfully moved from the ownership and operation of low yielding aged care assets to the ownership of well performing medical and healthcare services companies.
"Benefits from this strategy are now becoming evident with the strong performance of Abano's dental, audiology and radiology businesses," she said.
The Masthead offer came at a time when Abano was in a strong growth phase with excellent prospects.
The board believed the benefits of the current strategy were just starting to emerge and higher values than indicated in the Ferrier Hodgson range would be achievable if the company was successful in implementing its strategic plans and capitalising on market opportunities.
"Given the information outlined by the company and by the independent appraisal report, the directors believe investors should simply ignore the Masthead offer as being an opportunistic attempt to gain control without paying fair value or any premium for control," Ms Paterson said.
"It was also noted that Masthead is not a specialist investor in the health sector and it is unclear what its representatives would add to a well functioning board and management team."
Abano shareholders should be offered a significant premium for their shares under any takeover offer which would give control of the company to a majority shareholder.
A recent Cameron Partners report stated that the median premium for control paid across all offers in New Zealand since 2001 was 23.6 per cent.
Having received approaches from other parties expressing interest in Abano, the board had decided it was in the best interests of the company and its shareholders to allow qualified parties access to due diligence information for the purpose of formulating alternative proposals.
Abano shares closed at $4.35 yesterday, having been as low as $1.56 a year ago.
- NZPA
