Metlifecare takes pause to consider suitor

Metlifecare has suspended its share buyback programme as it considers a “credible” suitor who’s lobbed in a sub-par conditional offer.

On Tuesday the company’s shares had their busiest trading day in more than two-and-a-half years.

The retirement village operator and developer had only just embarked on a $30 million share buyback in an effort to bridge the discount between its share price — which last night closed at $5.73 — and its net tangible asset value of $6.96. That’s been shelved for now while the board considers a “highly conditional, non-binding preliminary expression of interest from a credible third party to acquire the company,” it said.

Refinitiv data showed a single trade of 3.62 million shares at $5.05 yesterday, which was a discount to the $5.18 the shares were trading at at the time. That amounted to about 1.6 per cent of Metlifecare’s stock on issue and was the most activity since April 2017 when Infratil sold its then 19 per cent stake at $5.61 a share.

Metlifecare said it has begun talks on the offer “although the price proposed is below the board’s expectations on value for the company.”

Any would-be bidder has to win over the NZ Superannuation Fund and ANZ New Zealand Investments for a takeover to succeed, with the institutions holding blocking stakes of 19.8 per cent and 11.8 per cent respectively. Other sizeable investors include Investment Services Group (6.4 per cent) and ACC (5 per cent).

Mark Brown of Devon Funds Management, which owns shares in Metlifecare, said he was not surprised at the offer given Metlifecare had been trading below the value of its underlying assets.