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Abano board rejects takeover bid

NZ Newswire logoNZ Newswire 13/12/2016 Paul McBeth

Abano Healthcare beat guidance as it lifted first-half earnings 62 per cent from a year earlier as the board rejected a partial takeover bid by dissident shareholders as significantly undervaluing the business.

Underlying profit rose to $6.3 million in the six months to the end of November from $3.9m a year earlier, and ahead of last month's forecast for earnings between $5m-$5.6m, it said.

Revenue increased 8.1 per cent while net profit was up 73 percent to $5.9 million. Abano declared an interim dividend of 16 cents per share.

Abano released the unaudited earnings ahead of the formal release on December 21 to give shareholders "timely information" about the company, which is under a takeover offer from Anya and Peter Hutson and James Reeve of Healthcare Partners.

They have offered $10 a share to build a 50.01 per cent controlling stake in the healthcare investor.

The shares last traded at $7.99 and have gained 5.4 per cent so far this year.

The company's board has previously warned investors to wait for their recommendation, and on Wednbesday rejected the effective price of $9.84, which excludes the dividend, as being too low and below the bottom end of independent adviser Grant Samuel's valuation range of $9.95-to-$11.96 a share.

The directors also said the offer wasn't for all of an investor's shares and acceptances could be scaled down to just 38 per ent.

"Today's excellent headline results underscore Abano's continued strong performance and future potential," chairman Trevor Janes said. "The Abano board believes Healthcare Partners' offer significantly undervalues Abano, and that Healthcare Partners' directors are seeking to acquire Abano and its businesses at a low value and at the expense of other shareholders."

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