15 Apr 2014

Abano makes offer to Hutson

8:03 am on 15 April 2014

Abano Healthcare has offered to buy disaffected major shareholder and former director Peter Hutson's half of its audiology business for $12.9 million.

That's Abano's own book value and more than the valuation Mr Hutson commissioned from KordaMentha, which valued half of the audiology business at $6.3-$9.4 million.

However, that was below the Grant Samuel valuation Abano commissioned last year, which priced half the business at $16.7-$19.8 million.

Mr Hutson, who with fellow shareholder James Reeves owns 19 percent of Abano, said last week the Grant Samuel valuation was fundamentally flawed.

Last year, Abano invited Mr Hutson to put a value on 50 percent of the audiology business and promised to either buy his stake or sell him Abano's stake at that price. Mr Hutson did not respond.

This time, Mr Hutson has described the buyout offer as a red herring.

Abano chairman Trevor Janes said Abano's latest offer was a genuine attempt to resolve a long-running dispute between the company and Mr Hutson.

"We were intrigued by the value that Mr Hutson put on the company. We actually think the business is worth more than that," he said.

"We've got confidence in the value of the business and so we thought 'if it's worth $12.9 (million) for us to have half of it, well why wouldn't we offer $12.9 for the other half'."

Last week, Mr Hutson called on Mr Janes to resign but Abano's board responded by saying it saw no merit in Mr Hutson's criticism of the company's current direction.

Mr Hutson said the buyout offer was designed to deflect from the core issues, including what he said was the poor performance of the dental division and increasing failures in corporate governance.