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Big profit jump for takeover target Abano

NZ Newswire logoNZ Newswire 20/12/2016 Paul McBeth

Abano Healthcare, fending off a hostile takeover from its biggest shareholder, has posted a 73 per cent gain in first-half profit.

Net profit after minorities rose to $5.9 million in the six months to the end of November $3.4m a year earlier, it said. Revenue was confirmed at $116.8m, an 8 per cent gain.

Abano released a summary of its results earlier this month, on growth in its dental network, to underline the value of the business in the face of a partial takeover bid from Healthcare Partners, an entity owned by cornerstone shareholders Anya and Peter Hutson and James Reeves.

Healthcare Partners on Tuesday criticised Abano's independent adviser report as using some unrealistic assumptions which plumped up Abano's value.

The target company has revised its valuation range to between $9.92 and $11.93, from $9.95 to $11.96, to reflect 45,860 restricted shares issued to management last year as part of a long-term incentive scheme.

Independent valuer Grant Samuel advised that this doesn't affect its assessment of the merits of the offer, and Abano's board still recommends shareholders reject the offer.

"While the Healthcare Partners partial takeover offer has been disruptive, management continue to focus on delivering strong results and an ongoing improving performance," chief executive Richard Keys said.

Abano's board confirmed an interim dividend of 16 cents per share.

Healthcare Partners' $10-a-share offer for 50.01 per cent of the company doesn't include the dividend, meaning its effective bid is $9.84.

Abano's shares last traded at $8.21.

The interim results show the healthcare investor bought 13 dental practices in the period, taking its tally to 197 in New Zealand and Australia, and it's bought three more this month.

"The company's acquisition strategy will continue to provide additional operational, scale, and synergy benefits for the dental group as it continues to expand," Abano said. "The board expects this positive result and growth trajectory to continue into the second half of the year."

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