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Advance placement to fund legal fight

BALCATTA-BASED Advance Healthcare Group Ltd will raise $400,000 through a share placement to fund legal action against a major shareholder, Nedlands-based PharmAust Ltd. The case brought by PharmAust concerns the validity of share transactions that took place before an AHG shareholder meeting in August last year, to vote on an offer by private equity player Hawkesbridge Ltd involving a debt for equity swap. The Hawkesbridge proposal resulted in up to 80 per cent of AHG being cont-rolled by the Sydney investment fund. Hawkesbridge sold an 11 per cent shareholding on the eve of the meeting to newly appointed Advance Healthcare chief executive Ken Atkinson. It has since sold most of its stake to Covenant Nominees Pty Ltd, a company controlled by Perth businessman Michael Boyd. The issue has been the subject of a tit-for-tat battle of announcements between AHG and PharmAust. Earlier this year, PharmAust said it had sought a merger with AHG at a price it claimed bettered the Hawkesbridge offer. AHG disputed the PharmAust valuation, called the move opportunistic and demanded that PharmAust make a formal takeover bid. At the heart of the battle are core pieces of business that AHG owns, and which are performing solidly despite the issues within the listed parent entity. These assets have attracted the interest of those in the pharmaceutical field such as PharmAust and Mr Boyd. AHG said the placement, at 2 cents per share, would be made to an unrelated party. Some of the funds would also be used to convene a meeting to repeat the vote which PharmAust had previously questioned. AHG said that it also proposed to offer existing shareholders the opportunity to participate in an entitlements issue at the same issue price as the placement.

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PharmAust (PAA)

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