Acurity takeover underway

JAMES WEIR
Last updated 11:04 28/07/2014

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A takeover offer has been launched for Wellington-based listed company Acurity at $6.50 a share.

Formerly Wakefield Health, Acurity has three private hospitals in Wellington and Hawke's Bay offering surgical healthcare services.

The bidders say Acurity faces capital spending of about $50 million to bring its flagship Wellington hospital up to earthquake code.

Connor Healthcare, a company established by the two principal shareholders in Acurity, has issued a takeover notice to acquire the balance of the shares it does not own in the listed private healthcare provider at $6.50 a share.

The partners in Connor already hold about 70 per cent of Acurity shares.

The all-cash offer represents a premium of 24 per cent above the closing price  of Acurity's shares on the NZX Main Board on Friday of 5.25.

Connor's spokesman, Mark Stewart, said the offer would be attractive to Acurity's shareholders, who had had meagre total returns over the last four years.

"Acurity faces formidable challenges, including considerable expenditure estimated at approximately $50m (Forsyth Barr research report dated May 19, 2014) to meet the earthquake code requirements at its flagship hospital in Wellington," Stewart said.

"This capital expenditure represents between $2 and $3 per share purely to maintain the existing capacity at the hospital."

Acurity's shares are not often traded, and largely neglected by institutional investors who would otherwise stimulate investor interest and be a creative force for change.

These factors, along with the fact that any significant capital expenditure would generate acceptable returns only in the long term, have led most shareholders to the view that it was in Acurity's best interest for it to be privatised.

"Connor believes its offer, at a premium of 24 per cent to the 30-day volume weighted average price (VWAP) is the highest price Acurity shares have traded at in four years, will be compelling to Acurity shareholders."

Connor is a company that will be 75 per cent owned by Austron (a company jointly owned by the Royston Hospital Trust Board and interests associated with the Stewart family of Christchurch) and 25 per cent owned by Sydney-based Evolution Healthcare (NZ) when the takeover offer is satisfied.

Austron and associated parties hold 59.07 per cent of the shares in Acurity and Evolution controls 11.7 per cent of its shares.

The takeover offer, which is subject to conditions set out in the Takeover Notice, including a 90 per cent minimum acceptance condition and approval from the Overseas Investment Office, is expected to be sent to Acurity shareholders on August 26.

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- The Dominion Post

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