Archer Hutson Consortium Asked to Price Audiology
Abano Healthcare Group Limited (NZX: ABA) has today requested Peter Hutson and his interests to name the price at which they will either sell their 50% holding in Bay International Limited to Abano or buy Abano’s 50% holding in Bay International.
The price is required to be the same for either alternative with Abano to have the right to decide whether it buys from or sells its interest to Hutson at Hutson’s nominated price. Bay International is the company through which Abano and the Hutson interests operate an audiology business in Australia and South East Asia.
Trevor Janes, Abano’s Chairman said, “Under the Archer/Hutson/Reeves indicative non-binding proposal to acquire 100% of Abano, a “nominal value” was ascribed to Abano’s audiology business. Under that proposal, the Hutson interests would acquire Abano’s share of the audiology business at this nominal value from an Archer/Hutson/Reeves owned Abano.
“We have a very different view on the value of the audiology group. The carrying value of our 50% shareholding in Bay International, as stated in Abano’s audited 31 May 2013 full year accounts, was NZ$12.9 million. This value was approved by the Abano Board, including Peter Hutson, after confirming no impairment was required and this was audited by PwC.”
“We call on Peter Hutson to respond to our invitation to name the price and agree to transact on the basis we have offered. We call on Archer to permit Hutson to do so, to the extent he would otherwise be restricted by his exclusivity arrangements with Archer. Our offer to buy the 50% of Bay International we do not own, or sell the 50% we do own, at our option, at the price Peter Hutson wants to put on the business will be a further step in the removal of Hutson’s conflicts of interest under the Archer proposal he has promoted. If Abano is the buyer of the remaining 50% of Bay International we will progress the audiology group strategy, with the full range of options available to a 100% owner, for the benefit of all Abano shareholders.
Peter Hutson resigned as a director of Abano on the 19 September 2013, after he was asked to do so by all other Board members, because of his significant conflict of interest. In addition, Abano has rejected the Archer/Hutson/Reeves non-binding proposal, which had an indicative price range of $6.97 to $7.14 per Abano share.
Trevor Janes concluded; “If the Archer/Hutson/Reeves consortium are serious about making an offer for the company, they should do so. Our shareholders can then assess the bid on its merits and with the benefit of an independent adviser’s report as required by the Takeovers Code.”