NZ regulator targets Archer consortium over aborted Abano deal
A consortium of investors including Archer Capital is subject to a civil action launched by New Zealand’s Financial Markets Authority (FMA) over an unsuccessful bid for Abano Healthcare Group.
Abano became the target of an unsolicited takeover bid by Archer Capital and Healthcare Industry Limited (HIL) - a vehicle controlled by Abano director Peter Hutson - in September 2013. The consortium held 14% of the company.
Archer and HIL were required to file substantial shareholder notices under regulations designed to ensure the market has sufficient information on the trading activities of parties who may be entitled to exercise influence over the voting rights of a public company. Archer and HIL made their filing on September 16 but the FMA alleges that "an agreement, arrangement or understanding to act in concert in relation to Abano shares existed between the parties" prior to this date.
"Immediate disclosure is particularly important in the case of understandings or arrangements among shareholders that may lead to a takeover proposal or a stand in the market," Belinda Moffat, director of enforcement and investigations, said in a statement.
The maximum financial penalty for breach of these regulations is NZ$1 million ($779,000).
Founded in 1999, Abano is New Zealand's first major publicly-listed investor and operator in the private healthcare market in New Zealand, Australia and Southeast Asia. After Archer and HIL's offer of NZ$6.97-7.14 a share was rejected, they obtained a five-month standstill agreement with shareholders, potentially allowing time for a new takeover bid to come together.
However, a revised offer of NZ$7.80 per share on November 19 was subsequently withdrawn. The consortium - which by this point also included James Reeves of Steamboat Capital, a 5% shareholder in Abano - cited a downgrade in the company's forecast profit. Abano said an independent valuation had found that NZ$8.30-10.05 would be appropriate for full control of the company.
Abano reported a net profit of NZ$4.9 million for the 12 months ended May 2014, up 75% year-on-year. EBITDA was flat at NZ$27.8 million while revenue rose 2% to NZ$211.1 million. The company's stock is currently trading at NZ$6.80, up 6.75% so far this year.
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