Arrangements Among Archer and Associates Disclosed
Following Abano Healthcare Group Limited (NZX:ABA) yesterday advising the market of the relationship between Archer Capital, Peter Hutson and his interests and Mr James Reeves, Abano notes the disclosure today by Archer Capital and its associates (interests associated with Abano director Mr Peter Hutson and shareholder James Reeves) (“the Archer/Hutson group”).
The agreement which was released to the market today provides for arrangements under which (amongst other things):
- For no apparent consideration, Hutson and Reeves shareholding entities, which together hold just under 19.99% of the shares in Abano, agree “standstill” arrangements in respect of their shares for a period of up to 5 months. Abano expects that these arrangements were entered into with a view to giving Archer that period of time to attempt to conclude an arrangement for the purchase of up to 100% of Abano.
- Archer makes no commitment to make a takeover offer or promote a scheme of arrangement. Hutson and Reeves interests commit not to sell their shares or encourage or respond to any other opportunity to do so. They also agree to advise Archer should they (or any of their representatives – a term which explicitly includes Mr Hutson personally) receive any other approaches or alternative proposals for a transaction that would result in another person acquiring majority ownership of Abano or all or a substantial part of Abano’s business and assets or that may otherwise be prejudicial to the Archer/Hutson group “proposal”.
- The arrangements require Mr Hutson’s shareholding entity to procure that its representatives (which, as noted above, include Mr Hutson) adhere to the standstill arrangements and keep Archer informed of matters which might be prejudicial to the Archer/Hutson group’s proposal.
- To the extent of any conflict, the arrangements purport to allow Mr Hutson’s fiduciary obligations as a director of Abano to prevail over any conflicting obligations of Mr Hutson’s associated shareholding entity under the arrangements.
The arrangements as to the membership of the Archer/Hutson group and their association at the sub 20% level are not “new news” and the additional disclosures provide no indication of the nature of or timetable for any further action, if any, on the part of the Archer/Hutson group.
For Abano, it remains “business as usual”. However, the Board is seeking advice on, and is concerned as to the practical implications of the arrangements on both Mr Hutson’s ability to effectively discharge his duties as a director of Abano given his various conflicts of interest and the Board’s confidence that he can realistically achieve these requirements.