Haley Van Leeuwen.
Abano Healthcare appears to be stuck in gridlock as the
company's biggest shareholder and former director, Peter
Hutson, remains at loggerheads with the board.
Forsyth Barr broker Haley Van Leeuwen said yesterday the
issue came down to Mr Hutson's decision on either accepting
the offer to have his 50% stake in the Bay International
business bought or making a formal takeover to purchase all
''If the latter was to be pursued, the Abano board would need
it to be at approximately $8.50 a share before they would be
willing to allow due diligence on a full takeover to
proceed,'' she said.
''What we are seeing here is boardroom warfare.''
The Abano board made a formal offer to Mr Hutson to buy his
stake in Bay International at $12.9 million - offering him a
premium on what he believed the business was worth, Mrs Van
Mr Hutson commission Kordamentha to critique an early
valuation report by Grant Samuel of the Bay International
Bay International is the Australian and international
audiology business owned 50-50 between Abano and Mr Hutson.
Kordamentha's report came to a valuation of $7.8 million for
the 50% stake in Bay International versus the Abano
board-commission report by Grant Samuel at $18.2 million.
''The Abano board has been quite strategic with the offer of
$12.9 million as they are effectively trying to back Peter
into a corner and force him to show his cards,'' Mrs Van
It emerged yesterday that Mr Hutson lobbied directors as
early as last August to support the removal of Abano chairman
Trevor Janes and change strategy at the health clinic
Healthcare Industry and Steamboat Capital, the entities
representing Mr Hutson and fellow rebel shareholder James
Reeves, have given Abano until today to respond to a request
for a shareholders meeting to rerun the vote on Mr Janes'
Messrs Hutson, Reeves and Archer Capital were rebuffed in an
attempted takeover of the company and in turn this week
rejected a $12.9 million cash offer from Abano to buy out the
50% of Bay International Mr Hutson owned.
Mr Hutson held ''at length one-on-one'' discussions with the
company's non-executive directors in August last year where
he ''expressed my concerns about the company's directions,''
and the attempted Archer Capital-backed takeover would have
been ''a diplomatic solution to the problem,'' he said in a
letter to Mr Janes on April 10.
The letter says he went public with his concerns in
September, and since the aborted takeover had approached
deputy chairwoman Susan Paterson ''seeking to discuss
continuing underperformance and rapidly deteriorating
standards of corporate governance''.
He had wanted to ''discuss the state of the company and
specifically your position.''
Mr Hutson released the letter in response to Abano's April 10
statement ''that Hutson/Reeves continue to refuse to engage
with the board, despite numerous invitations to meet with the
full Abano board and/or board representatives.''
Mr Hutson said he repeatedly sought meetings with Mrs
Paterson, but without success.
''It represents a new low in Abano's ethics for which Mr
Janes is accountable,'' Mr Hutson said in a statement.
Abano, and Mr Janes himself, have ruled out a rerun of the
vote and, at this stage, Messrs Hutson and Reeves have only
called for the meeting, without starting the process required
for a meeting to be held.
An extraordinary general meeting can be called at the request
of 5% of a company's shareholders, which the pair's 19% stake
They have nominated May 27 for a shareholders' meeting.
The shares were unchanged at $6.40 yesterday, and have edged
up 0.5% this year.
- Additional reporting by BusinessDesk