Masthead Queries: Are There Any Bidders?
18 November 2007: Masthead today questioned whether any further parties were conducting due diligence on Abano
Masthead’s Mark Stewart said the company remains very vague about the current status of parties it is supposedly talking
to and allowing to do due diligence.
“Is it one, is it two or are there any? When will we be told definitively? The Abano board seems to be eager to inform
shareholders of purchases that it has made (albeit at the revenue level, and not disclosing cost), but in the interests
of proper continuous disclosure why isn’t the board willing to keep shareholders properly informed about the due
“The clock is ticking and this, despite what the Abano board may think about our $5.00 a share offer, is material
information for shareholders who are contemplating whether or not to sell into our offer. If no other bid arises and we
are unsuccessful, it is our strong expectation that the Abano price will fall, as has happened in the THL share price
following the recent unsuccessful takeover.
“While the Abano board may be recommending shareholders to reject our offer, they should not stand in the way of the
process with some vague disclosure that raises shareholder expectation that someone is out there who will pay more than
$5.00 a share.
“What is a real concern to us are comments by the Abano board that it has allowed a company to do due diligence that was
really only interested in part of the business. If, as the media has speculated, this party is the Australian private
equity company Crescent Capital Partners, which has strong links to the Australasian medical device distributor
Lifehealthcare, then it is clearly a competitor. What screening process has the Abano board undertaken to allow parties
that may be competitors to do due diligence?
“At the end of the day it is the Abano shareholders who have real money at stake here. Many will have paid prices for
their shares well below $5.00, with some looking at a four-fold plus gain on their shares. Taking some profit off the
table now must be attractive for them given the real risks that Abano faces in achieving its bullish earnings targets
over the next five years. So we ask the board to come clean and let shareholders decide, with complete information of
the status of other potential buyers, if any.”