Haley Van Leeuwen.
A possible sale of Abano on the terms offered by
Archer Capital was not in the interests of the company or its
shareholders, Abano chairman Trevor Janes said yesterday.
On Friday, Australian-owned private equity firm Archer, with
the support of Abano director Peter Hutson, approached the
group to reactivate its previous unsolicited indicative
The proposal had not materially changed but included a
downwards adjustment of the indicative price range to $6.97
to $7.14 per share, to take into account the recent 13.7%
dividend and capital raisings.
The shares last traded at $6.55.
Abano's audiology business was to be divested after the sale,
for a nominal sum, to interests associated with Mr Hutson.
Mr Janes said Archer's indicated price range fell well below
the level the board considered reflected fair value for a
100%-control transaction, particularly in light of prices
recently paid for consolidated dental businesses in Australia
and the various growth stages of each of Abano's existing
''The independent directors of the board are confident in the
company, its management, strategic plan and its own
assessment of long-term value creation.
"The board does not believe Archer's involvement would yield
any benefit other than a potential short-term liquidity
option for shareholders.''
Archer was not restricted from pursuing any takeover
initiatives provided for under New Zealand law if it wished
to do so, Mr Janes said.
Forsyth Barr broker Haley Van Leeuwen said Archer Capital had
identified the dental sector as an area in which it wished to
As Abano was the second-largest operator in the
Australasian dental sector, it was seen as a good ''vessel''
to enter the market.
Archer had asked for commercially sensitive information on
Abano for its due diligence.
''Given their intent to enter the dental market and
potentially become either a future competitor or owner of
Abano, you can imagine there is a very slim chance of this
information being handed over,'' Mrs Van Leeuwen said.
There would be questions asked of the long-term relationship
between Mr Hutson and the board, Mrs Van Leeuwen said.
''I would find it hard to believe it's a comfortable
position. Hutson's invested interest in Abano sits at about
15%, which puts the board in a difficult position.''
Abano remained focused on expanding the Lumino dental brand
throughout New Zealand and Australia. The dental market in
New Zealand was worth $650 million, while the Australian
market was estimated to be worth $A7.5 billion ($NZ8.5
Abano saw good opportunities within the corporate dental
sector, Mrs Van Leeuwen said.
Forsyth Barr expected to see increased corporate
consolidation in the dental market, she said.