Crescent circles Abano

Australian buyout firm Crescent Capital Partners is having to resort to some unusual tactics as it seeks to unlock control of New Zealand health care group Abano.

Crescent has already ripped up its own copy of Buyouts 101 by launching a hostile $NZ120 million takeover bid for Abano, and is now in the process of rewriting Buyouts 102 after snapping up some minority stakes in its target at below the offer price.

Abano, a diagnostics, dental and audiology specialist not dissimilar to Australian takeover target Symbion Healthcare, became a likely takeover target in December 2006 when a wealthy Christchurch-based investment family, the Stewarts, snapped up a 19.9 per cent stake at $NZ1.55 a share.

The Stewarts went on to offer $NZ3.85 and then $NZ5 a share in a series of partial takeover offers (it wanted only 51 per cent) that were rejected by Abano. Crescent, which was given access to Abano's books in October, then produced a $NZ5.20 a share offer but this too has been rejected by Abano.

Crescent snapped up a 10.9 per cent stake just before launching its bid and has since lifted that to 19.8 per cent after buying stakes at a similar price. It has agreed to escalate these purchase prices to the bid offer should it reach its 90 per cent target.

Abano has noted that Crescent's tactics are "unusual behaviour” for a buyout firm, but has refused to budge, citing a Korda Mentha independent expert's report which – based on recently revised profit targets provided by Abano – values the target at $NZ5.15 to $NZ5.90 a share.

Abano also insists that other suitors may emerge, an idea rejected by Crescent.

Nevertheless, its on-market purchase of shares in the past week from two institutions, Brook Asset Management and BT – a situation allowed in New Zealand but not Australia – is a defensive manoeuvre as it seeks to make any rival bid impossible.

Meanwhile, Crescent continues to negotiate with the Stewarts, who used First NZ Capital for their offers but are not using an advisor just now. Neither is Abano, although they have retained legal firm Harmos Horton Lusk. Crescent is using the Auckland-based Cameron Partners.