Countdown to reveal Metlifecare bidder
Retirement firm to lift lid soon, Xero shares pass $80
There is speculation in the market that the mystery bidder for Metlifecare could be Canadian infrastructure and property investor Brookfield Asset Management.
Metlifecare’s shares have spiked after it revealed it was in talks with an un-named non-binding bidder last week.
Before the bid announcement the retirement village operator was trading at $5.08 a share, well down on its net tangible asset value of $6.96.
On Monday Metlifecare revealed it had appointed investment banker Jarden to advise it on the process sending the share price upwards to $6.09.
One market source told Stock
Takes Brookfield was being talked about after its acquisition in Australia of aged care provider Aveo Group for A$1.3 billion ($1.37b) in August.
Brookfield, which has US$365b ($570b) worth of assets, is no stranger to the New Zealand market. It this year bought Vodafone New Zealand in a joint venture with Infratil in a deal valued at $3.4b.
A spokeswoman for Brookfield said it had no comment to make on the speculation.
Metlifecare has told investors it will have an update in two weeks, which market players say is just part of the process.
Given it is a non-binding offer Metlifecare could have waited longer to announce the bid to the market but was forced to reveal it because it couldn’t pause its share buy-back without a good reason and likewise couldn’t proceed with the buy-back with the potential offer negotiations going on.
Petrol price shake-out
Z Energy’s share price has been on a roller coaster ride of late. Pulling it downwards has been anticipation of the negative impact from a fuel price market study the Commerce Commission has been undertaking.
Its final report is due to be released next Thursday. But counterbalancing that has been activity in Australia with rival petrol company Caltex.
ASX-listed Caltex, which owns the Gull business in New Zealand, revealed plans this week to spin off a half share of its 250 property assets into a separately listed real estate investment trust expected to be worth around A$1b.
Then on top of that has come a bid from Canada’s Couche-Tard to buy Caltex for A$8.6b. So far Caltex shareholders have indicated the bid is too low.
But Z investors will be watching with interest to see how the deal plays out and whether the valuation will help buoy Z Energy, which is seen to be similar to Caltex.
If the ComCom recommendations are not as tough on the industry there could also be some upside after the report release. Z Energy shares closed on $5.15 yesterday.
Was Xero call the right one?
It’s nearly two years since Xero delisted from the New Zealand stock exchange in favour of the ASX and in that time its share price has rocketed.
Shares in the accounting software stock hit new highs this week of more than A$81 — more than double the A$31.18/$34 price it was trading at on its last day of dual-listed trading.
That might suggest the company was right in choosing to ditch its New Zealand listing, but Milford Asset Management’s Sam Trethewey says the stock may have been trading at that even if it remained on both exchanges.
Trethewey, who was one of a number of institutional investors who spoke out strongly at the time of Xero’s departure, said one of the biggest issues was that Xero made the decision without consulting its shareholders.
“They didn’t consult with shareholders at all.”
Trethewey said there was also wider concern about the impact it would have on the New Zealand capital market.
“We had been long-time supporters of the company and saw a lot of potential for it.”
One of Xero’s arguments for having one listing was to allow its inclusion in the major Australian indices, allowing it to attract more institutional support from Australian fund managers.
Trethewey said the company had benefited from inclusion in the indices.
“But by and large the bulk of it [the share price gain] would be based on the underlying performance of the company.”
That’s something Xero would have had regardless of where its shares were listed.
Trethewey said software as a service companies had performed strongly in recent years and Xero had also benefited from government’s moving to encourage businesses to file their taxes online.
Xero was the largest listed company when it left the NZX by market capitalisation and would still be up there today on par with Fisher & Paykel Healthcare.
F&P’s market cap hit $12b this week after a strong rise in its share price. Converting Xero’s A$11.47b market cap would put it roughly at the same level. “Having Xero still listed [on the NZX] would certainly enhance the depth and offshore interest in our market,” Trethewey added.
Cashing in
Spark’s former managing director Simon Moutter has cashed in 70,000 shares in the telco giving himself a pre-Christmas bonus of $314k.
Moutter left the company at the end of June after resigning in April in a move that surprised the market.
He told the Herald he had only intended to be chief executive for between five and seven years. He had been there since 2012 after moving into the role after a stint heading up Auckland Airport.
At 59 years old many others would be seeking a move into directorships and governance but Moutter has hinted that he still has another CEO stint in him.
He told the Herald in June: “I do feel still ‘hands-on’. I don’t feel ready yet to make a portfolio career in a governance sense. I’m a hands-on guy and I don’t feel finished yet. I’d like to do a significant core role.”
Moutter has signalled he will likely take the summer off before moving into any other executive role.
But if he does need another cash injection he owns another 2 million shares in Spark which, at the current share price, are worth around $9 million.
Xero was the largest listed company when it left the NZX by market capitalisation and would still be up there today.