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Abano offered three times book value for Bay International stake

Wednesday 27th April 2016

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Abano Healthcare says it has received an unsolicited approach to buy the listed medical and dental centre investor's 50 percent stake in audiology company Bay International for almost three times book value.

The Auckland-based company said the non-binding proposal was from "an international hearing device manufacturer" which it didn't identify. The other half of Bay International is owned by interests associated with Abano's founder Peter Hutson. Bay International owns Bay Audio, an audiology retail network in Australia with a smaller footprint in South East Asia.

The indicative consideration is in excess of $30 million, compared with a current book value of $11.9 million, Abano said in a statement.

"Following consideration of the proposal, Abano will proceed with further discussions with the hearing device manufacturer and has initiated a divestment process in respect of its shareholding under the Bay International shareholders agreement," it said. That agreement includes pre-emptive rights for Hutson including what is known as a "tag along right" to require "an exit on no less favourable terms than those applicable to Abano."

The process was expected to take three to four months and there is no guarantee that a sale will eventuate, Abano said.

In 2013, Hutson and another Abano shareholder, James Reeves, teamed up with Australian private equity firm Archer Capital for a hostile and unsuccessful takeover attempt at Abano.

Abano shares rose 2.6 percent to $7.90 and have gained 1.6 percent this year.

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