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Connor Healthcare tries again for Acurity takeover

The three biggest shareholders of Wellington hospital owner Acurity Health Group have put a second application to the Commerce Commission, reducing one shareholder's influence on the holding company, Connor Healthcare, in a bid to ease competition concerns created by a takeover.

Connor needs the regulator's tick of approval to take over the private hospital operator, to acquire the shares it doesn't already own. Connor is made up of Sydney-based Evolution Healthcare, which separately owns Boulcott Hospital in Lower Hutt, and Acurity's other two major shareholders being the Stewart family and the Royston Hospital Trust.

Evolution's ownership of the Boulcott Hospital blocked the earlier application, with the regulator deciding it would put three of the Wellington region's four private hospital under the group's control, which had the likelihood of substantially lessening competition.

Connor has proposed to reduce Evolution's stake to 11.7 percent from 25 percent in the new application.

The group has until Dec. 22 to declare the takeover unconditional under the Takeovers Code, otherwise the offer will lapse.

The offer was tweaked last month, successfully seeking a two-for-11 fully imputed taxable bonus share issue by Acurity to let shareholders gain access to $2 million in imputation tax credits. The deal meant Connor would cut its price per share to $6.13 from the $7.25 offer, leaving the total consideration paid to investors intact.

Shares of Acurity last traded at $5.881, below the offer price, and have climbed 28 percent this year.