Hostile takeover target Abano Healthcare's board has rejected outright the offer by dissident shareholder group Healthcare Partners, which is after a controlling 50.1% stake in the dental chain.
To underscore Abano's financial health, the company released its ''headline results'' for its half year yesterday, with detailed results scheduled for release on December 21.
Healthcare Partners, representing Peter and Anya Hutson and James Reeves, already have a 19% stake in Abano and want to increase that to 50.1%, offering $9.84 per share.
Abano chief executive Richard Keys said in a statement yesterday its board ''unanimously recommends'' shareholders rejected the offer, as ''too low'' and ''significantly undervalues'' the shares and it was below the bottom end of the independent advisers' report which valued Abano in a range of $9.95 to $11.96 per share.
Abano's half-year results were ahead of guidance and well above last year's results, with after-tax profit up 73% to $5.9million, underlying net profit after tax up 71% at $6.3million and the 16c interim dividend up 60% on last year.
Mr Keys highlighted the Healthcare Partners offer was partial; potentially only 38% of the shares held by any individual would be purchased if all shareholders were to accept the offer.
''The company would then be under the control of Healthcare Partners and its directors, whose proposed strategy is unproven and unclear,'' Mr Keys said.
Mr Hutson and Mr Reeves were unsuccessful in 2013 when making a $6.97 offer for Abano.
Abano chairman Trevor Janes said that given Healthcare Partners had sent its takeover offer to shareholders, Abano released its headline results to give shareholders ''timely information'' to help them consider their response to Healthcare Partners.
''The excellent headline result underscores Abano's continued strong performance and future potential,'' he said in a statement.
He said Healthcare Partners was not only significantly undervaluing Abano and trying to acquire Abano and its businesses at a low value, but that would be at the expense of other shareholders.
Healthcare Partners had recently relented and given permission for Abano to release a 16c interim dividend to shareholders which has since been deducted from Healthcare's initial $10-per-share offer.
However, Mr Keys said Abano's board was disappointed Healthcare Partners had since refused to allow Abano's usual dividend reinvestment plan to continue to operate.
''This plan enables shareholders to choose to have their dividends applied to new ordinary shares in Abano, rather than paid in cash,'' he said.
The reinvestment plan had previously been well supported by shareholders with about 50% of all dividends being taken up in shares under the plan during the past five years, he said.
