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Wakefield bid for Norfolk stumbles again

Wednesday 30th June 2010

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Wakefield Health’s offer for Norfolk Investments, part-owned of Grace Hospital in Tauranga, has stumbled for a second time after failing to garner enough support from the target company.

Wakefield was knocked back in its first proposal to Norfolk, who shareholders include its own chairman, John Calder. The company subsequently sweetened its offer for Norfolk to $3.60 a share from $3.52, valuing Norfolk at about $23 million. After talks with Norfolk, Wakefield said it had “binding acceptances” for more than 50% of the stock, but in the event the offer again failed to get over the line.

“The meeting of shareholders of Norfolk Investments held last night did not provide the required approval for Wakefield’s revised formal offer for that company to proceed, Wakefield chief executive Andrew Blair said in a statement today.

“Wakefield will now evaluate its remaining available options.”

Shares of Wakefield traded unchanged at $6.90 on the NZX today and have fallen almost 9% this year, about matching the slide in the NZX 50 Index.

Wakefield wants to acquire Norfolk to gain its 60% stake in Grace Hospital, which it says is a natural extension to facilities it operates in Wellington and the Hawke's Bay.

Norfolk was created by a group of doctors, who formed a joint venture with Southern Cross Hospitals to develop Grace, a purpose-built suite of operating theatres, inpatient beds and associated services which opened in 2007.

Wakefield owns Wellington’s Bowen and Wakefield hospitals and Royston Hospital in Hastings. The remaining 40% of Grace is owned by Southern Cross.

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