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Wakefield sweetens offer for Norfolk

Friday 4th June 2010

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Wakefield Health sweetened its offer for Norfolk Investments, which controls Tauranga’s Grace Hospital, and said it has binding acceptances for more than 50% of the stock.

Wakefield lifted its offer for Norfolk to $3.60 a share from $3.52, valuing the target at about $23 million. Including an unchanged, fully imputed dividend of 10.73 cents, the total offer amounts to $3.71 a share.

The revised proposal “follows a period of engagement with Norfolk shareholders and directors, which has confirmed that there remains strong support for Wakefield involvement in that company,” chief executive Andrew Blair said in a statement today.

The increased offer comes after Norfolk, which owns 60% of Grace, unexpectedly shot down the previous proposal at a shareholder meeting last week. Norfolk’s investors include Wakefield chairman John Calder, and the company had to seek a waiver to make the offer.

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. Its shares were unchanged today at $7.

NZX-listed Wakefield has gearing of just 8.8% and could fund the acquisition at the same time as it is expanding its Bowen Hospital site. Its market value if about $100 million and its shares have declined about 25% in the past 12 months.

The remaining 40% of Grace is owned by Southern Cross.



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