Tuesday 8th October 2013
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Abano Healthcare, the specialist medical investor, is calling on a consortium mounting a hostile takeover bid to put a price on the audiology unit it plans to dump for a nominal value if the acquisition succeeds.
The healthcare firm's board has requested the bidders, made up of the company's biggest shareholder and former director Peter Hutson, Australian private equity firm Archer Capital and investor James Reeves, name how much Hutson would pay for Abano's half-stake in Bay International and are offering to buy him out at the same price. Abano valued its stake in the audiology business at $12.9 million as at May 31.
"Our offer to buy the 50 percent of Bay International we don't own, or sell the 50 percent we do own, at our option, at the price Peter Hutson wants to put on the business will be a further step in the removal of Hutson's conflicts of interest under the Archer proposal he has promoted," chairman Trevor Janes said in a statement. "If the Archer/Hutson/Reeves consortium is serious about making an offer for the company, they should do so."
Archer Capital, with Hutson, who owns about 15 percent of the specialist healthcare investor, have made an indicative offer of $6.97 a share, valuing Abano at $131.4 million. As part of the deal, an Archer-owned Abano would sell its audiology unit to Hutson for a nominal sum.
Abano's board rejected the initial indicative offer from Archer as being too low, and turned down its request for due diligence on the basis that the private equity firm will likely become a competitor.
If it buys out Hutson's stake in Bay International, it will proceed with its audiology strategy and put forward a full range of options to all shareholders, Janes said.
Hutson resigned from the board last month after his fellow directors urged him to do so, saying he was conflicted by his involvement in the takeover bid.
The shares slipped 0.1 percent to $6.84 yesterday, and have gained to 10 percent this year. The stock is rated an average 'buy' based on two analyst recommendations compiled by Reuters, with a median target price of $7.21.
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