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Stewart, Royston Hospital Trust sew up control of Wakefield Health

Wednesday 25th July 2012

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A joint venture between Stewart family's interests and the Royston Hospital Trust Board has pre-emptively sewn up control of Wakefield Health in a partial takeover bid for the private health service provider.

The Stewart family and Royston each own 19.99 percent of Wakefield and have agreement with AMP Capital Investors (New Zealand) to acquire enough of the fund manager's holding to hold 50.01 percent via their JV investment vehicle, Austron, according to the notice of takeover. The $6-a-share offer values the target at $103.6 million, and is a 25 percent premium to the stock's trading price of $4.80.

AMP Capital will sell between 862,000 and 1.73 million shares, or 5 percent to 10 percent of Wakefield, depending on acceptances from other shareholders. That level of acceptances will also scale how much of the Royston and Stewart family stakes are pooled.

All shareholders will be able to sell at least half their shares in the offer.

The notice of takeover has been lodged with the Takeovers Panel today, and a formal offer and independent adviser's report will be forthcoming.

In March, the family of Christchurch-based businessman Mark Stewart family exited its 10.2 percent stake in medical and pet supplies firm Ebos Group.

The Wakefield takeover bid comes ahead of next months' annual shareholders' meeting, where investors will be asked to change the group's name to Acurity Health Group.

Shareholders will also be asked to lift the pool of directors' fees to $420,000 from $400,000, its first such increase in four years.

In May the hospital operator posted a 27 percent increase in earnings as demand for ACC-funded surgery made up for flatter private revenue.

Last year the group succeeded in a long-running effort to take over Norfolk Group, which owns 60 percent of the Grace Hospital in Tauranga, and also bought a 30 percent stake in Endoscopy Auckland and Labaroscopy Auckland.

The stock is rated 'outperform' according to the one analyst recommendation compiled by Reuters, with an enterprise value of $117.7 million.

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