Share Buyback Offer

Abano Healthcare Group has today mailed shareholders the Share Buyback Offer previously advised.

Chairman’s Letter to shareholders

Dear Shareholder

The sale of Abano’s interest in its New Zealand audiology business, Bay Audiology, to National Hearing Care completed on 3 November 2009. This sale resulted in a capital gain of over $70 million and, as previously advised to shareholders, the Board’s intention is to return some of this capital gain to shareholders by undertaking an off-market, pro rata voluntary share buy-back and cancellation, together with the already announced special early interim dividend. The pro rata nature of the buy-back will ensure all shareholders are treated equally and given the opportunity to receive $5.93 for every share sold into the buy-back.

In addition to the pro rata buy-back offer to shareholders, we are also offering to buy-back 100 percent of the shares held by those shareholders whose total shareholding following acceptance of the pro rata share buy-back offer would be less than 50 shares (a Minimum Holding as defined in the NZSX Listing Rules).

As the buy-back is voluntary, should any shareholder choose not to participate in the buy-back offer, other shareholders may elect to sell more than their pro rata entitlement to the company.

Details of the buy-back offer, as well as instructions for completing the Acceptance Form, are detailed in the enclosed Offer Document.

This share buy-back, together with the recently announced dividend, will see a total of $58 million being returned to shareholders following the sale of Bay Audiology.

Following the capital return to shareholders, the reduction of debt and the investment into the new merged Bay Audiology/National Hearing Care audiology business, Abano will still have sufficient funds to continue investment into its existing growth businesses. These have been identified as Audiology in Australia and Asia, Dental in New Zealand and Australia and Radiology in New Zealand. These are all strong businesses with considerable potential and growth opportunities, and we see an exciting future for Abano in the years ahead.

We are pleased to have the opportunity to thank our shareholders for their ongoing support with the recent special early interim dividend and this share buy-back.

Please read the enclosed Offer Document carefully before deciding whether or not to participate in the buy-back offer. If you decide to accept the buy-back offer, complete and return the Acceptance Form. If you have any questions in regards to the buy-back offer, contact your financial adviser.

Your board recommends you accept the share buy-back offer and we look forward to your continued support of the Group and its strategy.

Alison Paterson
Abano Healthcare Group Limited

Acceptance Form FINAL

Share BuyBack 2009 FINAL