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Abano selliing stake in Bay International

NZ NewswireNZ Newswire 22/05/2016 Jonathan Underhill

Abano Healthcare Group has agreed to sell its 50 per cent stake in audiology company Bay International to interests associated with Peter Hutson for $32 million.

The listed medical and dental centre investor also said earnings would be at the top end of guidance.

It follows an unsolicited approach from an international hearing device manufacturer, which triggered Mr Hutson's pre-emptive rights under Bay's shareholder agreement, which allowed him to acquire the shares at the same price, the company said.

Last month, Abano said it received an approach from a third party that it didn't name offering almost three times book value for its share of Bay, which owns Bay Audio, an audiology retail network in Australia with a smaller footprint in South East Asia.

Abano chief executive Richard Keys said the sale would generate a surplus over book value of approximately $20m once Abano's $A1.8m ($NZ1.92m) share of Bay Audio Australia's deferred tax asset was recognised. The sale was in keeping with Abano's focus on its growing trans-Tasman dental business.

Abano said excluding the impact of the Bay sale, its results for the 2016 financial year would be at the top end of the $8.2m-$9m underlying profit guidance it gave last month.

Profit in 2015 was $8.8m, or $5.6m excluding two businesses it has since sold.

Proceeds from the Bay sale will be used to repay debt and help fund Abano's continued expansion of its Lumino The Dentists network in New Zealand and Maven Dental Group in Australia, Mr Keys said.

Settlement of the sale is expected in the next three months.

Abano shares last traded at $7.65 and have edged up 1.6 per cent in the past 12 months.

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