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Healthcare Partners unhappy with Abano bid

NZ Newswire logoNZ Newswire 20/12/2016 Paul McBeth

Grant Samuel has come in for a second barracking in the space of a month with Healthcare Partners, which accused the independent adviser of plumping up the valuation of Abano Healthcare.

Healthcare Partners, the investment vehicle of Anya and Peter Hutson and James Reeve and cornerstone shareholder in Abano, says Grant Samuel's valuation range for Abano of $9.95-to-$11.96 per share is wrong.

They say it's based on assumptions that project more acquisitions than the historical average, overestimate Abano's ability to sustain earnings from the dental practices, and has a higher earnings multiple than its 2013 assessment while Australian same-store sales are declining.

"We consider some of Grant Samuel's assumptions to be unrealistic and inflate their valuation," Healthcare said in a letter to Abano shareholders. "We want to improve Abano's performance for the benefit of all shareholders."

Healthcare offered $10 a share, including a 14 cent dividend, to build a 50.01 per cent controlling stake in the healthcare investor, in a partial takeover bid that's been rejected by the board as being too low.

Peter Hutson and James Reeves criticised the Grant Samuel valuation when they last mounted a bid for Abano, commissioning their own report by KordaMentha which suggested the target company's adviser overvalued Abano's shares.

The criticism of Grant Samuel comes less than a month after a separate independent adviser's report was panned by ASX-listed Bapcor, a prospective buyer of NZX-listed Hellaby Holdings.

The Australian automotive company complained the Grant Samuel report incorrectly excluded Hellaby's corporate head office costs from the valuation, which would cut Hellaby's value by 42-to-48 cents a share.

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