Ebos tells shareholders 'act now'

Ebos Group is urging shareholders to take up share entitlements as part of a $149 million capital-raising to help the purchase an Australian company rather than ''lose value''.

Shareholders in Ebos, a hospital and healthcare products supplier, may buy seven new shares at $6.50 each for every 20 they own in a "renounceable entitlement" as part of the capital raising.

The $149m renounceable offer is one of the ways Ebos is raising capital for its $1.1 billion purchase of Australian pharmaceutical wholesaler and distributor Symbion.

The offer means shareholders can act on the rights and buy more shares as under the rights issue they can sell the rights on the market, or they can decline it.

However, those that decline the entitlement and don't sell the rights potentially lose value.

In the first couple of days of trading of Ebos Group "rights" got off to a slow start.

Ebos shareholders who do not want to buy new shares can sell the rights to buy the shares on the NZX to those who do.

Today Ebos chief financial officer Dennis Doherty, in a notice issued through the NZX exchange, said it was very important that all shareholders take action regarding the entitlement.

This could either be done by taking up their entitlement to subscribe for new shares by July 1.

Otherwise they should sell their entitlement or ''rights'' to new shares by June 25.

''Doing nothing means you are likely to lose value. Act now,'' Doherty said in the statement

Today the rights were trading 2 cents weaker at $2.95 under the new NZX code of EBORC.

The head Ebos shares were trading 4 cents higher at $9.55.

Investors need to add the rights price with the extra $6.50 needed to pay for a full share.

The Symbion acquisition, which was supported by Ebos shareholders at a special meeting held in Christchurch on Friday, will more than double its market capitalisation to $1.25 billion.

Ebos, which has its head office in Christchurch, will also become the third largest New Zealand company on the NZX by revenue, behind Fonterra and Fletcher Building. Ebos' revenues will leap to $6 billion from about $1.5 billion now following the purchase.

The Press