Metlifecare shareholders back offer overwhelmingly

SHAREHOLDERS in Metlifecare have approved the $1.27 billion takeover offer with 148 million votes in favour and just 14 million against.

The company announced the results to the NZX, saying 69% voted in favour of the scheme, which needed 50% support to succeed.

That announcement follows chairman Kim Ellis telling a meeting in Auckland yesterday 90.7% of Metlifecare proxy shares were voted in favour of the deal and only 8.8% against.

Asia Pacific Village Group, owned by Sweden’s EQT, can now buy all of Metlifecare and has agreement from the New Zealand Super Fund that it will sell its 19.9% stake — a point which rankles Mr Ellis.

EQT Australia and New Zealand managing director Ken Wong welcomed the result which he said was ‘‘overwhelmingly in favour’’.

‘‘EQT looks forward to applying its longterm vision to accelerate Metlifecare’s growth and deliver the highest quality care to its residents.’’

Mr Ellis said the $1.27 billion offer was made on a Sunday afternoon and the board was under pressure to decide whether to put the new offer to shareholders.

‘‘There was very little interest in taking the thing to the contrary of NZ Super’s position,’’ he said.

‘‘I think I used the term a fait accompli in the statement in the booklet. I hope that explains the rather awkward position we were put in.’’

Mr Ellis asked himself at the end of the meeting if he had any regrets about how the board had handled the offer: ‘‘At all times we sought to put the interests and rights of shareholders first,’’ he said.

Metlifecare chief executive Glen Sowry said that during recent months, there had been a transition committee process between EQT as the new potential owner and senior management team to ensure a smooth and productive transition of governance and ownership.

‘‘Having been dealing with EQT as the ultimate owners over recent months, those discussions and planning for the transition have been entirely constructive.

‘‘EQT has had significant experience in aged care,’’ he said, citing business in Germany and elsewhere.

‘‘They have ambitions for Metlifecare to grow it and invest in it and ensure it continues to improve and be a better company in the future.’’

A shareholder asked about the potential of the business.

Metlifecare chief financial officer Richard Thomson said the figures in the independent advisers’ report were longterm unit price growth assumptions. Shortterm movements would be both positive and negative but a longerterm view was needed. The housing market had defied Covid gloom, he said.

‘‘Plus we’re transacting at or close to valuation and in some cases above,’’ Mr Thomson said of retirement village unit sales.

About 400 to 500 real estate transactions were carried out annually by Metlifecare and the market was showing robustness, he said.

A lawyer spoke on behalf of the board and explained how circumstances changed after the New Zealand Super Fund made its position clear with regard to the second offer.

A shareholder asked why the board felt the revised scheme terms were fait accompli on the second deal.

‘‘In the context of the moment back then, we got a very clear direction from a majority of shareholders that we canvassed that they wanted to vote on the scheme and would vote in favour of it,’’ Mr Ellis said.

‘‘There was no way at all we could not take the opportunity for shareholders to allow them to make the decision.

‘‘The snag was that the terms had been placed in front of us and it was on a take it or leave it basis so that put us in a very delicate position that if we had attempted to renegotiate core three terms, there’s a danger it could slip away.

‘‘Yet we had a majority saying they were happy so we’d be putting at risk an offer that a majority were keen to vote on and vote positively for. So we didn’t want to get presumptuous and felt it was absolutely imperative to get the scheme in front of shareholders.’’

Director Mark Binns said they had no choice about letting the litigation go.

‘‘We had tried to put forward a proposal that would allow a decision to be made.

‘‘We had to make a decision whether we accept the package as offered which meant letting go of the litigation rights and offering the shareholders a vote.’’

A shareholder asked if the company would be subject to legal action if the takeover was rejected.

Mr Ellis said he imagined there would be no case, ‘‘but you can’t promise there won’t be action’’.

A shareholder asked if the company would institute the living wage after the sale on October 29.

Mr Sowry said it was bargaining with its unions on behalf of its staff in the collective agreements. It wanted to reflect the efforts of the staff and being in the midst of negotiations, it was inappropriate to discuss where those talks would end.

If the sale was rejected, would directors who supported it resign?

Director Chris Aiken said he would consider the mood of the shareholders in relation to the decision they had to make.

Mr Ellis said if he was not ‘‘kicked out’’, he would encourage directors not to resign.

A shareholder said if the deal went ahead, more than 100ha of land would be transferred to a foreign entity, which would make New Zealanders tenants in their own land.

‘‘That land gets transferred to New Zealand residents who live in our villages and participate fully in them,’’ Mr Aiken said.

‘‘Technically there’s a transfer of the assets to the business but they’re then divested into the hands of residents who are retired.’’— The New Zealand Herald

❛ At all times we sought to put the interests and rights of shareholders first Metlifecare chairman Kim Ellis