Metlifecare head averse to takeover
AUCKLAND: Metlifecare chairman Kim Ellis opposes the proposed $1.27 billion takeover by Asia Pacific Group of the NZXlisted retirement specialist.
Documents released to the NZX yesterday say he considers the takeover support from NZ Super Fund, with 19.9% of the company, had limited the board's negotiating power.
As a director and shareholder, he said he was disappointed about what he called the fait accompli process and outcome and did not consider the $6/share offer yet to be voted on adequately reflected the underlying value of shares.
The original offer was $7/share, resulting in a $1.49 billion offer from Asia Pacific, a subsidiary of Switzerland’s EQT Infrastructure. But that was lowered to $6.
‘‘Accordingly he is unable to support the scheme and therefore recommends shareholders vote against the scheme.
‘‘Mr Ellis will be voting the Metlifecare shares held by his associated family trusts against the scheme,’’ the document said.
A majority of Metlifecare’s directors back the deal: Chris Aiken, Mark Binns, Alistair Ryan and Rod Snodgrass recommend shareholders vote in favour of it.
Mr Ellis said the unusual fait accompli core terms supported by Metlifecare’s largest shareholder left no opportunity for the board to use litigation to negotiate the offer price up to the $6.35 valuation midpoint of the earlier independent adviser’s report.
He considered Metlifecare's strong litigation position was displayed in the FY20 underlying profit and NTA results announced when the company declared its fullyear result on August 26.
For the takeover scheme to succeed, more than 75% of the votes cast and more than 50% of the total number of Metlifecare shares on issue must be voted in favour.
A scheme booklet was released yesterday that showed independent adviser Calibre Partners assessed Metlifecare shares to be worth $5.80 to $6.90. EQT's offer price is below the midpoint. Metlifecare traded yesterday around $5.90. Shareholders are to vote on October 2.
Last month, The New Zealand Herald reported on how property revaluations reflecting valuer caution because Covid19’s economic impact drove Metlifecare to report a bottomline loss of $33.7 million for the June year, compared with a $51.2 million profit in 2019.
The listed retirement business said revenue rose 7.7% from last year's $124.5 million to $134.1 million. It had reported a solid operating performance in a period that included the full effects of the Covid19 lockdown.
Chief executive Glen Sowry said despite the significant challenges and costs involved in successfully keeping residents and employees safe from Covid19, the company delivered an underlying profit before tax of $93.8 million, slightly below last year’s strong performance.
‘‘This is an excellent achievement in a tough period. After an encouraging first half we experienced a temporary, but major sales decline in April and May 2020 due to the Governmentmandated lockdown restrictions.
‘‘While our whole team did an incredible job of keeping our villages safe, we invested heavily in additional staff, training, security and personal protective equipment,’’ Mr Sowry said.
‘‘We were pleased to see sales momentum return in late May...
‘‘Despite the challenges imposed on us by the lockdown, we managed our costs well and maintained good margins,’’ he said last month.