The two sides are believed to have signed an innovative agreement this weekend to implement the programme, which must withstand the uncertainty caused by COVID-19 and possible lockdowns. The problem is that shareholder regulatory systems are fundamentally flawed, as the bidder usually wants the target company`s board of directors and large shareholders to accept a proposal before it is announced and the independent analysis is completed. This significantly limits the possibility of a competitive bidding process, a situation that would allow shareholders to maximize value and is one of the main objectives of the Code. The private equity firm also wanted an exclusive deal in which Abano would not reach out to other potential bidders during the five-week period. The Abano Healthcare controversy began in July 2013, when Archer Capital wrote to Chairman Trevor Janes offering to buy 100 percent of the New Zealand company in collaboration with Peter Hutson as part of an arrangement. Hutson was a director of Abano and a 14% shareholder. An adaptation event can occur at any time before the morning of the implementation date. This means that the Scheme price could be reduced after shareholders have voted on the scheme if an adjustment event occurs after the date of the shareholders` meeting. The various adaptation events are summarised in the Annex. It is assumed that Abano Healthcare`s Board of Directors will unanimously recommend to shareholders to accept a new offer from Melbourne-based buyout company BGH Capital and co-investor Ontario Teachers` Pension Plan, as part of an agreement to be reached through an arrangement plan. In its 2006 annual report, the Takeovers panel sharply criticized arrangement systems, with Chairman John King writing that “they do not have the same protection for shareholders” as the code. Shortly after the introduction of the code, acquirers began using alternative arrangement schemes to control target companies. Under an arrangement regime, the bidder and the directors of the target company generally agree to the terms of an acquisition or merger before shareholders are notified.

The bidder will have full control if 75% of the votes cast at a general meeting support the transaction. Abano shareholders voted to approve the program on March 20, 2020. On March 24, 2020, Abano announced that it had closed all of its New Zealand dental practices following the New Zealand government`s decision to move to ALERT level 4 regarding COVID-19. Therefore, Abano Bidco has officially indicated, within the framework of the Programme Implementation Agreement (SIA), that there are circumstances that may lead to a substantial adverse change (as defined in the ESA). On March 30, 2020, Abano announced that the AIS had ended with Bidco due to the significant detrimental change that occurred. As a result, the proposed regime has not been implemented. The controversy surrounding the takeover bid against the arrangement scheme is once again in the spotlight.. . . .

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