Otago Daily Times

Metlifecar­e head averse to takeover

- ANNE GIBSON

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.

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Kim Ellis

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