Businessman may appeal commission’s decision
CHRISTCHURCH businessman Mark Stewart says he and his partners will consider an appeal against a Commerce Commission decision over the takeover of a Wellington private hospital business.
Connor Healthcare, a company owned by Stewart family interests with partners, has just completed a takeover of the Wellington private hospital business Acurity but it had to alter its terms and make a second bid with concessions to get the commission’s nod for the takeover.
The initial takeover bid was rejected by the commission and it is this decision that Connor Healthcare may appeal to the High Court.
Stewart said the parties would make their decision once they had scrutinised the commission’s report giving its reasons for the initial rejection.
The report was expected to be released soon.
Stewart said there was plenty of competition in the Wellington private hospital market, especially because Southern Cross Healthcare was such a formidable player, but the commission decided the takeover would substantially lessen competition.
Southern Cross had a hospital in Wellington and opposed its takeover, he said.
Connor would have a 30-day window after the report was released to decide whether to appeal.
‘‘At this stage we don’t even know what’s in that report so whether that’s a viable option one might want to consider or whether the determination of the com- mission is in fact correct, is something yet to be determined.’’
Before the takeover bid, Stewart family interests with the Royston Hospital Trust Board owned almost 60 per cent of Acurity and an Australian investor Evolution owned 11.3 per cent.
Acurity had two private hospitals – Wakefield and Bowen in Wellington – and another in Hawke’s Bay as well as a 60 per cent share of one in Tauranga.
Evolution also owned Boulcott private hospital in Lower Hutt.
Evolution, the Stewarts and Royston trust Board joined forces and formed Connor Healthcare for the takeover bid.
The commission ruled that the takeover would result in three of the four private hospitals in Wellington – Boulcott, Bowen and Wakefield – coming under common ownership, leaving only Southern Cross Hospital as the competition.
Stewart said the commission considered that the parties joining forces under Connor was effectively a full merger of their hospital interests, but Connor disagreed.
‘‘To argue that Southern Cross is somehow not able to compete with us, even if Boulcott was considered as part of Acurity, which it is not because it is owned by Evolution, from our point of view is not credible.’’
Southern Cross had about 60 per cent of the health insurance market and the ability to allocate a lot of work to its 19 hospitals.
To satisfy the commission Evolution had to reduce its stake in Connor to 11.3 per cent, a default back to the status quo, Stewart said.