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Abano shareholders clamour for discounted stock in share purchase plan

Wednesday 2nd October 2013

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Abano Healthcare Group, which is resisting a potential takeover bid from a major shareholder, has met its $9.25 million capital raising target in a heavily oversubscribed share purchase plan as investors clamoured for the discounted stock.

The healthcare services investor got applications for $23.8 million of the shares and were scaled back, it said in a statement today. The shares, which were sold at $5.95 apiece, recently traded at $6.61.

The share purchase plan was the second leg of a capital raising by Abano, which completed a $9.25 million placement on Sept. 2 at the same price, also oversubscribed. The total $18.5 million raised is to be used primarily to invest in dental surgeries.

"Dental offers a significant opportunity and remains our primary focus for growth," said chairman Trevor Janes. "We remain in acquisition mode in both Australia and New Zealand as we build on our position as the second largest Australasian dental provider.

Abano's trans-Tasman dental network is currently made up of 145 practices.

Last month, managing director Alan Clarke said a potential takeover bid of Abano led by private equity firm Archer Capital and involving former director Peter Hutson significantly undervalued the targeted dental business and completely ignored the company's other units.

Archer, Hutson and investor James Reeves hold about 19.99 percent of Abano's shares, and are locked up in a standstill arrangement for the next five months to allow the takeover attempt. Their indicative offer of $6.97 a share, valuing Abano at $131.4 million was rejected by the company.

As part of the deal, an Archer-owned Abano would sell its audiology unit to Hutson for a nominal sum.

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