Metlifecare board backs new takeover offer by Swedish fund manager
Monday, 30 December 2019
The New Zealand Super Fund has backed the sale of retirement village operator Metlifecare to a Swedish-based fund manager.
Metlifecare's board has recommended shareholders accept a revised takeover bid of $7.00 a share from Asia Pacific Village Group, an entity created by Sweden's EQT Fund Management.
A trading halt which went on Metlifecare shares just before Christmas has been lifted, with shares opening at $6.38.
The Super Fund, which holds 19.895 per cent, told the NZX today it would support the deal if it went ahead.
**READ MORE:
* Flattening Auckland property market slashes retirement village operator's profits
* Retirement village at the edge of an Auckland golf course will be fairway to heaven**
EQT's latest offer is a 50c improvement on its previous offer on December 19, and Metlifecare's chairman Kim Ellis said it had the support of a number of institutional shareholders.
Both the board and executives who were shareholders had decided to back the buyout, subject to valuation by an independent adviser and in the absence of a better offer.
Metlifecare has previously said two other bidders had shown interest. Ellis said the board had made it clear for some time that the company was undervalued by the market.
The price of $7.00 is a 38 per cent premium on the stock's closing price prior to the first offer on December 19.
Ellis said EQT's values aligned with the company's. 'We are confident that they will continue to focus on ensuring Metlifecare's village and care operations have customers at the core, as well as growing the business through development of new villages,' he said.
Metlifecare was founded in 1984 by businessman Cliff Cook and has been on the NZX since the early 1990s, but it became stronger after merging with Vision Senior Living and the private life care assets of Retirement Villages New Zealand in 2012.
It currently has a portfolio of 28 villages finished or under construction, predominantly in the upper North Island, including Gulf Rise on Auckland's Hibiscus Coast.
However, in recent times the slowing Auckland property market and rising construction costs have been hurting the company, which saw profits fall 68 per cent to $39.2m in the year to June.
Its assets rose $53.9m in value over the 12 months to June 2019, compared to a spectacular $132.7m in the previous year.
Ken Wong, managing director at EQT Partners, said his company was committed to continuing to provide the exceptional care to New Zealanders which Metlifecare is known for.'
Shareholders must still vote on the transaction, and a special meeting will be called in April 2020; by which time, an independent adviser's report will be prepared.
The scheme is also subject to High Court approval and Overseas Investment Office consent.