Dental and medical specialist provider Abano Healthcare this week began fending off a hostile more than $100 million takeover bid, being led by one of its own directors.
Abano on Wednesday rejected a 100% takeover offer by 14% shareholder and director Peter Hutson and an undisclosed third party. The latter had subsequently indicated they would ''promptly'' begin a hostile takeover bid.
Shares in Abano spiked to a four-month high following the announcement, up more than 12% to trade around $6.55.
The hostile bid, from a party wanting to operate in the Australasian dental sector, took brokers at Craigs Investments Partners and Forsyth Barr by surprise, but both noted heightened interest, in general, in healthcare companies.
Forsyth Barr broker Haley Van Leeuwen said during the past three years Abano had grown its business to more than 140 dental practices, with annualised revenues of about $100 million.
''They are a significant corporate player in this sector. They would be seen to be a good launchpad for a business to expand into this sector,'' she said.
Craigs Investment Partners broker Peter McIntyre said the ''out of the blue'' offer, and now takeover play, could lead to Abano's numerous divisions being broken up.
Craig's stock valuation was $6.70, but if a takeover went ahead that could push out to a range of $6.70 to $9.46, depending on how a purchaser valued the loss-making audiology division, Mr McIntyre said.
He said if the takeover was successful, Mr Hutson and the other buyer could take separate divisions and look to sell the diag-nostic and rehabilitation areas. Mr McIntyre predicted with the takeover going public, and initial offer rejection, the share price would remain at ''elevated levels''.
Abano's board statement on Wednesday was to update shareholders that they had received and rejected an unsolicited offer from a third party seeking 100% of Abano's shares.
While the indicative price was above current market prices, it ''substantially failed'' to reflect Abano's value or prospects, and was ''not close to a level which would warrant granting an exclusive period of dealing and due diligence''.
''The board does not currently intend to further engage with the party concerned,'' the board said.
Abano wants to raise up to $15 million in a shareholders' purchase plan and placement to underpin growth in Australia and Asia. Last week, Abano booked a record full-year revenue of $207 million and a more than five-fold increase to after-tax profit, at $2.8 million.
