Ebos share at record price after contract

By Chris Hutching

Friday 17th September 2004

Ebos Group senior executives could be excused for feeling a little smug this week after confirming a key five-year contract to continue supplying pharmaceuticals to the Auckland District Health Board and a share price that remains near record levels despite a 6.17% block of shares sold by institutional investor Rangatira.

The health board contracts account for 25-30% of the company's pre-tax revenue but there were concerns after the tender dragged on for several months.

The tender is in two parts, one of which is yet to be resolved.

The board confirmed the pharmaceuticals tender, which accounts for almost 60% of the combined value of the two tenders (Ebos' subsidiary, Health Support, is the incumbent provider). A second tender for medical consumables is still being worked through, with a decision expected before Christmas.

The sale of shares by Rangatira apparently took Ebos directors by surprise, coming on the same day (last Friday) that Ebos confirmed the pharmaceuticals contract.

About one million shares were sold at $3.80 a share on the same day and another 1.7 million shares were sold via institutions and brokers at an average $3.87 a share.

But the on-market retail price hit a record $4.10 (sell) before settling back at $4.03.

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