A split has occurred between the chair of retirement village operator Metlifecare and the rest of the board over the planned $1.3 billion takeover by a Swedish private equity firm.
The revised EQT offer to take over Metlifecare at $6 per share has the backing of most of the board and most major shareholders, including the NZ Superannuation Fund. Photo: 123rf.com
EQT has offered $6 a share, at the lower end of an independent report which valued Metlifecare at between $5.80 and $6.90 a share.
EQT originally offered $7 but then pulled out saying the pandemic had materially changed Metlifecare's value and outlook.
The revised offer has the backing of most of the board and most major shareholders, including the NZ Superannuation Fund.
However, Metlifecare's chair Kim Ellis has called on shareholders to reject the offer, with his reasons spelled out in the report on the bid.
"As a director and shareholder, Mr Ellis is disappointed in the fait accompli process and outcome and does not consider the scheme price adequately reflects the underlying value of Metlifecare Shares," the report said.
Ellis had been backing legal action to force EQT to stick with its original offer, but the new deal is conditional on court action being called off.
He objected to the Superannuation Fund's actions, which he said left the Board with little time to consider alternatives and effectively locked it into supporting the new offer.
"The unusual 'fait accompli' core terms supported by Metlifecare's largest Shareholder left no opportunity for the Board to use the pending litigation to negotiate the offer price up to the NZ$6.35 valuation midpoint of the earlier Independent Adviser's Report, let alone closer to the original price of NZ$7," the report said, reflecting Ellis's views.
The Superannuation Fund owns about 20 percent of Metlifecare, and while its director on the board has not made a recommendation, a spokesperson said it made decisions for commercial reasons, and was backing the bid as the best offer on the table.
"While a difficult and finely balanced decision, the members of the director majority consider that the ... NZ$6 per share, when weighed against the uncertainty, disruption and potential risks associated ... is reasonable in all of the circumstances."
Shareholders will vote on whether to accept the offer in October.