Friday 3rd October 2014
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The Financial Markets Authority has filed civil proceedings against Australian private equity firm Archer Capital and Abano Healthcare shareholder Peter Hutson, saying the parties should have notified the market of their deal to act together on a prospective takeover bid earlier than they did.
The market watchdog alleges Archer and Hutson's investment vehicle Healthcare Industries should have filed a substantial shareholder notice to the stock exchange earlier than its Sept. 16, 2013 disclosure, as the agreement to act together in what was an aborted takeover bid for Abano was entered into before then, the FMA said in a statement. The regulator is seeking declarations of contravention and pecuniary penalties, with the Securities Markets Act allowing for a maximum penalty of $1 million.
"Timely and accurate disclosure is central to the promotion of a well–informed and transparent market. A fully informed market leads to a fair and transparent market," FMA director of enforcement and investigations Belinda Moffat said. "Immediate disclosure is particularly important in the case of understandings or arrangements among shareholders that may lead to a takeover proposal or a stand in the market."
Last year Hutson, who was a director of Abano at the time, and fellow shareholder James Reeves teamed up with Archer to make an informal bid for Abano at $6.97 a share, which would have seen the Australian private equity firm take the healthcare investor's dental businesses and hand the audiology units to Hutson for a nominal sum.
The offer was turned down by the Abano board, which viewed at as too low and refused due diligence access saying Archer could end up as a direct competitor. Hutson and Reeves later tried to oust chairman Trevor Janes, calling a special meeting of shareholders, though the resolution was voted down.
Hutson resigned from the Abano board on the urging of other directors because of a perceived conflict of interest, and he and his wife Anya were forced out of their executive positions from their Bay International joint venture with the healthcare investor.
Shares of Abano Healthcare last traded at $7 and have gained 9.9 percent so far this year.
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