The Board of Abano Healthcare Group Limited (NZX: ABA) unanimously recommends
that shareholders REJECT the partial takeover offer made on 9 December 2016
by Healthcare Partners Holdings Limited.
This is a company associated with Peter and Anya Hutson and James Reeves who
have all been involved in previous attempts to gain control of Abano''s
businesses and to force changes to Abano''s Board.
The reasons for the Abano Board''s recommendation are set out in full in the
Target Company Statement, which also incorporates the Independent Adviser''s
Report prepared by Grant Samuel & Associates Limited, and accompanies this
announcement.
In summary, the reasons for the Abano Board''s recommendation are that:
o The Effective Offer Price is too low and it is only for some of your
shares. Your Directors believe that the Effective Offer Price of $9.84
significantly undervalues your shares. It is below the bottom end of the
Independent Adviser''s valuation range of $9.95 to $11.96 per Abano share, and
19% below the midpoint of the range.
o The offer is a partial offer. It is NOT an offer for all Abano shares. You
will only receive the Effective Offer Price for the shares that are taken up
under the offer (potentially only 38% of your shares if all shareholders
accepted the offer for all their shares).
o The Implied Weighted Average Offer Value (an important metric which
recognises the partial nature of the offer) is only $8.87 per share. This is
well below the Independent Adviser''s valuation range and, at only a 7.3%
premium to Abano''s 30 day volume weighted average price (VWAP) of $8.27, is
materially below the control premium which shareholders should expect.
o The Effective Offer Price does not fairly value, or compensate you, for the
control you would be ceding to Healthcare Partners; nor are you compensated
for the risk of being a minority shareholder in a company controlled by
Healthcare Partners.
o If the offer is successful, it is very likely you will be left with the
majority of your shares in Abano (up to 62%). The company would then be under
the control of Healthcare Partners and its directors, whose proposed strategy
is unproven and unclear. The value of your remaining shares is likely to fall
and liquidity (i.e. the ability to sell Abano shares on market) will be
significantly reduced.
o Abano has an established and proven strategy and a track record of
delivering earnings growth and shareholder value. Healthcare Partners'' offer
is being made at a time when the value and benefits of Abano''s investment
into its dental group are just beginning to be realised.
It is important to note that shareholders cannot time their acceptance of the
offer to maximise the number of shares taken up. The offer will automatically
extend if Healthcare Partners reaches its acceptance target within the last
seven days of the offer period. The Abano Board will advise shareholders if
Healthcare Partners reaches its acceptance target so that shareholders can
consider their options.
In forming its unanimous recommendation to REJECT the Offer, the Abano Board
has had regard to a number of factors including the merits analysis in the
Independent Adviser''s Report, and the assumptions and other matters addressed
in detail in the Target Company Statement.
The Target Company Statement is available on the Abano website at
www.abano.co.nz. The printing and mailing process is underway and printed
documents will be sent to shareholders as soon as possible. Shareholders
should read the Target Company Statement (including the Independent Adviser''s
Report) carefully and in full before deciding what action to take in response
to Healthcare Partners'' offer.
ENDS
For more information, visit www.abanohealthcare.co.nz or please call:
Richard Keys, Chief Executive Officer, Tel: +64 9 300 1413 Mob: +64 274
818368
Trevor Janes, Chairman, Tel: + 64 274 935033
(i) The Effective Offer Price is Healthcare Partners'' offer price adjusted,
in accordance with the terms of the offer, to deduct Abano''s 16 cent per
share interim dividend, which was announced by Abano on 14 December 2016.
(ii) The Implied Weighted Average Offer Value takes into account shares sold
into the offer and the value of retained shares if all shareholders accept
for all their shares. Refer to page 7 of the Target Company Statement for a
more detailed explanation.
(iii) Refer to page 7 of the Target Company Statement for explanation of 30
day VWAP
End CA:00294247 For:ABA Type:TAKEOVER Time:2016-12-14 08:42:50