Recovering revenues at Abano Healthcare force its suitors to offer more, plus the return of Heartland Bank’s 2 percent mortgage offering

Abano Healthcare shareholders received an expected surprise yesterday after BGH Capital and the Ontario Teachers’ Pension Plan increased their takeover bid for the company by 30c to $4.75 per share, reflecting the strong recovery in the dental group’s revenue.

In August, Abano’s board unanimously backed a $4.45 per share scheme of arrangement downgraded from a $5.70 offer scrapped in March as its dental practices were unable to operate during the pandemic lockdown.

Despite Abano posting a loss of $48.7 million in the year to May, the company said conditions had been stronger in the past four months of trading.

Lumino said revenue growth of 18 percent across June, July and September was offset by a decline of 8 percent in August as a result of the almost three-week covid-19 restrictions on dental services in Auckland.

Unaudited group revenue was $125 million for the four-months ended September 30, up 9 percent on last year, necessitating the increase in the takeover price.

Any further lockdowns or adverse events will mean price reductions in the agreement which could cut up to 75 cents per share from the offer if these events occur.

Abano’s directors continue to unanimously back the scheme and said the company would likely have to raise capital to reduce debt if it fails.

The shares rose 13.2 percent to $4.30 when trading resumed.

Heartland launches new sub 2 percent mortgage offering

Heartland has reinstated its super low-rate online home loan offering of 1.99 percent after being forced to withdraw it in March following the onset of Covid-19.

In doing so Heartland has become the first bank to offer a sub 2 percent mortgage rate, which is now the lowest available in the market.

In addition to the new one-year fixed rate of 1.99 percent, it’s also offering a two-year fixed rate of 2.35 percent and a three-year rate of 2.49 percent. Alternatively, borrowers can choose Heartland’s 2.95 percent floating rate.

Heartland said it had provided $50 million of conditional home loan approvals during the March trial but next to none of those settled because of the pandemic.

The trial had tested customers’ appetite for a digital self-service application providing them with the ability to arrange a mortgage online and to get an answer in minutes.

Heartland CEO Jeff Greenslade said digitalising the offering meant lower costs for the company which could be passed to borrowers.

Heartland’s new offer is available to owner-occupiers with a deposit or equity of at least 20 percent who are refinancing or purchasing a stand-alone house on a single section in a major New Zealand centre.

Contact shares surge 45 percent in past three months

Investors who were game enough to buy Contact Energy shares following the announcement in July of the Tiwai Smelter’s imminent closure in 2021, have reaped a healthy gain of almost 45 percent in just three months, after the company’s likely inclusion in the MSCI index.

Contact shares fell sharply in July to $5.62, just 32c above their March low, after Tiwai owner Rio Tinto said it would close the smelter in August 2021 forcing the Government’s hand in an election year. The company’s expected inclusion in the MSCI index has also added further fuel to its share price

Contact shares closed up a further 3.2 percent yesterday to $8.10.

2020 Nobel Prize for Economics announced

American economists Paul Milgrom and Robert Wilson have been awarded the 2020 Nobel Prize in economics for their contributions to auction theory, the Royal Swedish Academy of Sciences said on Monday.

The prize for economics is officially known as the Sveriges Riksbank Prize in Economic Sciences. It was established by Sweden’s central bank and has been awarded since 1969 in memory of industrialist Alfred Nobel.

In 2019, the economics prize was awarded to Abhijit Banerjee, Esther Duflo and Michael Kremer for their work to alleviate global poverty. Duflo, a professor at the Massachusetts Institute of Technology, was the youngest person and only the second woman to be awarded the prize.

Last week, the World Food Programme was awarded the 2020 Nobel Peace Prize for its efforts to combat hunger and its “contribution to bettering conditions for peace in conflict-affected areas.”

British Airways Chairman & CEO step down

British Airways Chairman and CEO Alex Cruz will step down as the airline’s chief executive, parent firm IAG announced yesterday, with Aer Lingus Chairman and CEO Sean Doyle set to take the reins after a transition period.

The outbreak of the coronavirus has led to an unprecedented hit to air travel, with the pandemic bringing the industry to a near standstill.

More than 40 airlines have failed so far this year, and aviation experts expect more to follow in the coming months.

Cruz, who began his career at American Airlines, became British Airways chairman and chief executive in April 2016. He was previously CEO of Vueling from 2009 when it merged with Clickair, an airline Cruz founded in 2006.

China takes another step towards becoming fully cashless

While many governments globally have stimulated their economies in recent months, few have actually been giving away money, literally.

After starting one of the biggest real-world trials for its digital currency, China says it is pushing ever closer toward creating a completely cashless future.

Last week, the government in Shenzhen carried out a lottery to give away a total of 10 million yuan (about NZ$2.23 million) of the digital currency. Nearly 2 million people applied, and 50,000 people won.

The winners can now download a digital renminbi app to receive and spend it at more than 3,000 merchants in a particular district of Shenzhen. The south China technology hub is home to some of the country’s biggest tech giants including Huawei and Tencent.

The digital yuan is not a cryptocurrency like bitcoin. Instead, it is issued and controlled by the People’s Bank of China, the country’s central bank. And it is not looking to replace digital wallets like Alipay or WeChat Pay. It will likely work together with them and other banks.

Andrew Patterson is Newsroom's Markets Editor and has worked for decades as a financial journalist, radio presenter and editor with Australia's ABC, Radio Live and NBR.

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