Wylie’s Tanarra circulates Healius attack letter as shares slide

afr.com:

John Wylie’s Tanarra Capital wants a major overhaul at ailing pathology group Healius, saying the business is being run “extremely poorly” and management and the board do not have enough “skin in the game”.

Healius shares tumbled 33 per cent on Wednesday to a 24-year low of $1.225, after resuming trade following a rights issue at a hefty discount to reduce debt levels and relieve pressure from the banking syndicate.

Healius closed at $1.84 on November 17, but the 1-for-3.65 rights issue was priced at $1.20 per share. The institutional entitlement component raised $154 million, with about 92 per cent of entitlements taken up.

Maxine Jaquet became Healius CEO in March.  

Healius operates 2150 pathology testing sites and 148 imaging sites and was known as Primary Health Care until late 2018. Maxine Jaquet, who had previously been chief financial officer and chief operating officer, was elevated to chief executive in March.

Tanarra Capital, chaired by Mr Wylie, has an 8.5 per cent stake in Healius, making it the second-largest shareholder. It is furious about the destruction in shareholder value, and has been circulating a document to other institutional investors titled “Why Change is Essential”, which lists six main criticisms.

It claims the “business is being run extremely poorly” even considering a doctor shortage, with margins in the pathology operations below competitors.

Tanarra also claims there is a lack of accountability for weak performance, and capital allocation decisions have been poor. “The CEO runs a management structure with way too much indirect overhead”, with one example being a human resources department with more than 80 people working in it.

A Healius spokesman said the company was “facing a range of