MET - Metlifecare - one for the fundies?

[baaantom]

FYI a settlement is unlikely to be taxable income.

[Balance]

$1 per share works for me. Although I guess the taxman takes away a 3rd of it, which isn't so appealing.

Out of court settlement is taxable?

[bottomfeeder]

Out of court settlement is taxable?
Wouldnt think so, it would recovery of expenses with a top up of capital damages.

[Balance]

Wouldnt think so, it would recovery of expenses with a top up of capital damages.

If MET pays no tax on it, a tax free return can then be done via share cancellation.

[peat]

$1 per share works for me. Although I guess the taxman takes away a 3rd of it, which isn't so appealing.

at current price $2.64 per share is what I am hoping for.

Its easy APVG, do what you committed to do.

[Cyclical]

at current price $2.64 per share is what I am hoping for.

Its easy APVG, do what you committed to do.

Far be it for me to disagree with that :)

[winner69]

Even though lockdown essentially over I'm still bored as

So updated this - the low point late last year was when Winner Analytics Consulting did some work for Mr Couta and advised him that MET was a screaming buy - a few weeks later a takeover and we all cleaned up big time.

The next low was when Guru Butch announced that MET was a screaming buy. Ahead at this point in time but still waiting for the $6 plus payday.

But isn't it spooky that even with supposedly better fundamentals and a chance of a takeover the MET share price still struggles to improve its relativity against the Ryman share price....and looks like it will never revert to the mean.

On this chart MET has never been as cheap as it is compared to RYM

[Beagle]

at current price $2.64 per share is what I am hoping for.

Its easy APVG, do what you committed to do.

Woof Woof I agree !

[Cyclical]

at current price $2.64 per share is what I am hoping for.

Its easy APVG, do what you committed to do.

With the renewed upward momentum over there at OCA (think rising tide and all), and the fact NZ appears to have this Covid thing in hand, I wonder if EQT's desire to quit this contract may start to soften a little. Who wouldn't want some bargain basement bricks and mortar in our part of the world?

Crikey, just watched a painful interview by Jack Tame on Mr Muller... Here's one for Todd, sell NZ as a Covid free retirement village to the world.

[bottomfeeder]

Sorry, removed comment, in bad taste.

[Cyclical]

Excuse my ignorance, but are we likely to hear anything meaty on Thursday?

[peat]

Sorry, removed comment, in bad taste.

in some circles it is worse taste if you dont share.

[Beagle]

With the renewed upward momentum over there at OCA (think rising tide and all), and the fact NZ appears to have this Covid thing in hand, I wonder if EQT's desire to quit this contract may start to soften a little. Who wouldn't want some bargain basement bricks and mortar in our part of the world?

Crikey, just watched a painful interview by Jack Tame on Mr Muller... Here's one for Todd, sell NZ as a Covid free retirement village to the world.

I can't help but think with the ongoing reassuring Covid 19 results steadily coming in each day, EQT's case gets incrementally weaker as time goes on.
I'm not sure when we will get a ruling from the High Court mate. Unlikely on the day I would think but maybe Friday or next week ?

I'm starting to feel really good about MET again given the string of good Covid 19 results over the last 10 days and its relative value to others.
Chatting with Coutts this morning, we agreed, downside if they lose is probably only 30 cents. Upside if they win is probably about $2 in a negotiated settlement which is most likely or ~ $2.70 if they force the takeover at $7. On the other hand we agreed that the timeframe to force a settlement could be fairly lengthy and that EQT will be well resourced if it comes to a legal fight. All thing considered it doesn't look like a bad bet at around $4.30. I will continue to sit on what I have and take a dogged long term approach to this one.

[Cyclical]

I can't help but think with the ongoing reassuring Covid 19 results steadily coming in each day, EQT's case gets incrementally weaker as time goes on.
I'm not sure when we will get a ruling from the High Court mate. Unlikely on the day I would think but maybe Friday or next week ?

I'm starting to feel really good about MET again given the string of good Covid 19 results over the last 10 days and its relative value to others.
Chatting with Coutts this morning, we agreed, downside if they lose is probably only 30 cents. Upside if they win is probably about $2 in a negotiated settlement which is most likely or ~ $2.70 if they force the takeover at $7. On the other hand we agreed that the timeframe to force a settlement could be fairly lengthy and that EQT will be well resourced if it comes to a legal fight. All thing considered it doesn't look like a bad bet at around $4.30. I will continue to sit on what I have and take a dogged long term approach to this one.

Yeah, similar sentiment to my own. There are plenty of worse places to park your funds on the NZX atm (no pun intended). With the generally improving picture here in NZ, EQT may just need a gentle nudge from the courts with regards to them honoring their contract, and indeed, unless they feel they've got solid grounds to quash it, they'd be best to get on with settling, for their own sake as well as everyone else.

[bottomfeeder]

in some circles it is worse taste if you dont share.

OK but thought better about it. I said perhaps we should make cremation compulsory. Spur of the moment thought.

[Waltzing]

im surprised MR B is still in this one? can someone describe what the attraction of this stock is? a take over glamble ? based on some as yet not revalued NTA? This one is just to risky and surely the trade on this one is over? or not yet?

[Beagle]

Bought a few more today. Talked myself into it with my post above lol

[traineeinvestor]

Bought a few more today. Talked myself into it with my post above lol

Nothing like falling under the influence of a "Sharetrader Legend." :eek2:

[King1212]

He is one of the legend here. And earn a master title....from me....maori bro!

[nevchev]

Takeover panels comments not very helpfull.Seems to be a sitting on the fence announcement

[bull....]

Takeover panels comments not very helpfull.Seems to be a sitting on the fence announcement

just like the cml scheme they they had to keep deferring the scheme booklet because there was no takeover offer in reality only a court decision to come. looks like playing out the same


The Panel has, however, reserved its position as to issuing a ‘no-objection’ statement, should an application be made for final Court orders giving effect to the Proposed Scheme. This is because of the potential for there to be a significant time delay until resolution of the Termination Dispute and the consequent potential for new information to be relevant for shareholders’ consideration of the Proposed Scheme

https://www.nzx.com/announcements/353763

[JohnnyTheHorse]

The comments from the Takeovers Panel are completely expected and not important news... hence not marked price sensitive.

I believe the best outcome for shareholders tomorrow is that Initial Orders are granted. This would indicate that the courts believe there is a reasonable level of doubt that EQT can terminate the contract. Would by no means predict an end outcome, but would increase the pressure on EQT. That coupled with the rising market could increase the odds of a revised (lower) offer.

[Longhaul]

If the takeover ends up proceeding (fingers crossed), will this lift all retirement stocks like it did last year?

Thoughts?

[Beagle]

If the takeover ends up proceeding (fingers crossed), will this lift all retirement stocks like it did last year?

Thoughts?

If that happens I see considerable upside in the only other company in this sector still trading at a material value to its NTA - OCA. How much upside to the other stocks in this sector that are already trading at a material premium to NTA, I am not so sure. This could see OCA rerated to the average broker price target of around $1.16 or even somewhat higher.

[JohnnyTheHorse]

Breakout of that 440 resistance, albeit on low volume. Will this momentum have some volume behind it?

[Beagle]

Yet another day of Zero new Covid 19 cases and EQT's position keeps getting steadily and incrementally undermined....that's how I see it anyway.

[Beagle]

Nothing like falling under the influence of a "Sharetrader Legend." :eek2:

LOL Sometimes I find it helpful to type out my thoughts. Sometimes that leads to extra clarity and I find myself acting on my own post I have made. Yesterday wouldn't be the first time by any means. It usually ends well :) On the other hand a cynic might suggest if a dog barks often enough it believes what its barking about LOL

[traineeinvestor]

LOL Sometimes I find it helpful to type out my thoughts. Sometimes that leads to extra clarity and I find myself acting on my own post I have made. Yesterday wouldn't be the first time by any means. It usually ends well :) On the other hand a cynic might suggest if a dog barks often enough it believes what its barking about LOL

Yep. Putting it in writing is a good way to think things. I did that when I started planning for retirement over a decade ago. The other benefit of putting it in writing is becomes a means of holding myself accountable ... and so far this year, I wish I was a lot less accountable. :)

[King1212]

Looking forward for good news tmrw?

[peat]

Looking forward for good news tmrw?

its possible , but as with all legal matters I am very much inured to delay and deferral.

[JohnnyTheHorse]

its possible , but as with all legal matters I am very much inured to delay and deferral.

The hearing begins at 10am (but note this is still mainly just to get initial orders granted for the Scheme).

If they don't reach an out of court settlement then expect this to go on for a very long time.

[bottomfeeder]

Am happy to wait, If we get $7.00 or damages of $2.00 or more, increase in value due to deferred dividend, safe haven to stash money and increase in value to nta. All good.
DISC: HOLD and HOLDING.

[King1212]

Looking good I reckon....big buying ....

[Beagle]

The hearing begins at 10am (but note this is still mainly just to get initial orders granted for the Scheme).

If they don't reach an out of court settlement then expect this to go on for a very long time.

Fair comment but I am looking at the price of RYM and SUM start to go on a tear and wondering if $4.50 isn't the screaming bargain of the entire NZX ?
If you get left holding the baby 2.5% is okay yield nowdays :) I think I might get some more...

[King1212]

Was that u master Beagle...just bought more 40shares?lol

[Beagle]

Was that u master Beagle...just bought more 40shares?lol
lol I'm just sitting on my paws at the moment pondering this, (I already have quite a few) and a LOT of OCA..

[fish]

The hearing begins at 10am (but note this is still mainly just to get initial orders granted for the Scheme).

If they don't reach an out of court settlement then expect this to go on for a very long time.

The hearing from what I understand is far more than this-includes disputed MAC and prescribed occurrences.
I also have no expectations regarding timeframe but the hearing is also to expedite this

[bottomfeeder]

Have been listening to my own hype. Hate to chase a share price, but I bought another 3k at $4.50. Have to stop buying now, unless it goes down closer to $4.00. After all where else am I going to put money. Term Deposit? nah!

[King1212]

no covid case too,,,,so sentiment all positive!!!

[bottomfeeder]

Looking at my NZX watchlist, everything in the black and good numbers. I can hardly contain my exuberance. But learnt a lesson a while ago, Pride goeth before destruction. Oh well at least I had some good feelings for a little while before I pulled myself down to earth.

[King1212]

mate ..u got to stop buying...otherwise you will be soon need to file in your holding to NZX...lol

[bottomfeeder]

Always wanted to get my name in an annual report amongst the 20 largest shareholders.

[fish]

Fair comment but I am looking at the price of RYM and SUM start to go on a tear and wondering if $4.50 isn't the screaming bargain of the entire NZX ?
If you get left holding the baby 2.5% is okay yield nowdays :) I think I might get some more...

I am in the dark as to how todays court proceedings went
?any news

[peat]

I am in the dark as to how todays court proceedings went
?any news

whether EQT was entitled to cancel will be determined at a three-week hearing tentatively scheduled for November this year, more details of the dispute were traversed at today’s High Court at Auckland hearing on whether a vote can be held.

https://businessdesk.co.nz/article/metlifecare-stoush-will-be-difficult-and-expensive-court-told Paywall

[peat]

The renegers QC's (yes 2 of the cnuts) are making sure that shareholders know all about the costs and delays and risks associated with expecting a contract to be stuck to , in front of the learned Justice
Lang who reserved his decision on the shareholder vote, saying it would be released next week.

[fish]

whether EQT was entitled to cancel will be determined at a three-week hearing tentatively scheduled for November this year, more details of the dispute were traversed at today’s High Court at Auckland hearing on whether a vote can be held.

https://businessdesk.co.nz/article/metlifecare-stoush-will-be-difficult-and-expensive-court-told Paywall


Thanks.
Decided it was worth subscribing so have read the whole article.
Nothing I could see to have any effect on the SP

[Beagle]

Thanks Peat.

[traineeinvestor]

Am happy to wait, If we get $7.00 or damages of $2.00 or more, increase in value due to deferred dividend, safe haven to stash money and increase in value to nta. All good.
DISC: HOLD and HOLDING.

From the NZ Herald: "Metlifecare's options for remedy were to cancel the contract and seek damages, which are capped at $14.5 million or force EQT to uphold its end of the deal. It chose the latter."

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12335627

[bottomfeeder]

Just goes to show, the devil is in the detail. Have to read that a bit more carefully, before I buy any more. Still happy to hold without the takeover going ahead.

Unfortunately the article is paywalled, and I cant see how they presume the limitation of damages. I cant see anything in the agreement which limits damages. But there are different types of damages. I could look foolish talking about my take on the matter without studying the article fully. But even though the court warns MET, about the costs involved in pursuing the cancelled agreement, its unfortunate the court did not specify the risks and costs, as well as damages, (all types) that the bidder may incur in the process of cancellation. Without being involved, I must accept that MET has had legal opinions, on the success of their challenge, and whether damages are worthwhile the pursuit. I feel that the damages amount of $14 mill odd is based on acceptance of the MAC by MET, but further and different type of damages may be available by pursuing the specific performance of the agreement.
So I really havent changed my opinion too much at this stage.

[bottomfeeder]

The next results will be telling whether the bidder was correct in relying upon the MAC. If they are good it will definitely mean MET success in the pursuit of specific performance, but if they are below the parameters in the agreement it does not mean that the bidder will be sucessful. It may hurt our case a bit however.

[Balance]

The next results will be telling whether the bidder was correct in relying upon the MAC. If they are good it will definitely mean MET success in the pursuit of specific performance, but if they are below the parameters in the agreement it does not mean that the bidder will be sucessful. It may hurt our case a bit however.

Valuation done for the deal came in at $6.50 to $7.45.

New valuation has been done but not disclosed.

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12335627
"Independent adviser KordaMentha partner Grant Graham valued the company at between $6.50 and $7.65 a share earlier this month but updated the valuation last week. That valuation remains confidential". "In the statement of claim lodged May 15, Metlifecare asserts there is no basis for changing its 20-year forecasting methodology for asset valuation and that its most recent internal management forecast for underlying profit was $88.7m, consistent with its statement on April 26 that it expected year-end earnings of between $83m and $90m".

Last month I modelled out a 7.5% reduction in house prices (which was the medium of economists a few weeks ago) and allowed for accrued earnings to April 2021 and got a fair value NTA of $6.65 inclusive of all earnings for the next 11 months.

At the end of the day with the price where it is and my own estimates of fair value (although a takeover would be nice ) I am committed to this one way or the other and looking at the share prices of all others in this sector, the current share price of MET is very attractive, as is OCA's share price.

[King1212]

thanks Master Beagle for the sum up!!

[Baa_Baa]

Hey folks, non holder not playing this game, but what do you think about the economics of taking it on the chin with a fine plus legal costs versus having to shell out the total wad of cash for a business they’ve decided they don’t want? Which is the more likely outcome? Or do you bank on an outcome that the suitor who was but is no longer interested, is compelled to pay the mother load plus the legal fees? Where do you see the legal view landing on this?

[Beagle]

I am still cautiously hopeful of a negotiated settlement at a price in the $6 - $6.50 area before this goes to court in November but it may take a ruling by the High court in MET's favour, (acknowledging this can be appealed), to bring this about.

[King1212]

The company’s gearing (loan to valuation ratio) was 16% at balance date, remaining the lowest in thelisted retirement village sector and retaining ample capacity to fund future growth.

That made me okay to hold long term ...whether the takeover done or not done deal.

[Beagle]

The company’s gearing (loan to valuation ratio) was 16% at balance date, remaining the lowest in thelisted retirement village sector and retaining ample capacity to fund future growth.

That made me okay to hold long term ...whether the takeover done or not done deal.

Well said. I like this bit too "most recent internal management forecast for underlying profit was $88.7m" and well worth noting that includes the full effects of Covid 19 for the four months from March to June 2020. They did $90.5m underlying last year so after the wage subsidy Covid haven't hurt them much at all.

I think this shows the underlying resiliency of their business, just like OCA eh mate :).

[traineeinvestor]

The company’s gearing (loan to valuation ratio) was 16% at balance date, remaining the lowest in thelisted retirement village sector and retaining ample capacity to fund future growth.

That made me okay to hold long term ...whether the takeover done or not done deal.

Add in the cash saved by not paying the last dividend.

Agree on MET's balance sheet - that + discount to NAV makes it one of the safest stocks in the NZX at this time.

[fish]

Just goes to show, the devil is in the detail. Have to read that a bit more carefully, before I buy any more. Still happy to hold without the takeover going ahead.

Unfortunately the article is paywalled, and I cant see how they presume the limitation of damages. I cant see anything in the agreement which limits damages. But there are different types of damages. I could look foolish talking about my take on the matter without studying the article fully. But even though the court warns MET, about the costs involved in pursuing the cancelled agreement, its unfortunate the court did not specify the risks and costs, as well as damages, (all types) that the bidder may incur in the process of cancellation. Without being involved, I must accept that MET has had legal opinions, on the success of their challenge, and whether damages are worthwhile the pursuit. I feel that the damages amount of $14 mill odd is based on acceptance of the MAC by MET, but further and different type of damages may be available by pursuing the specific performance of the agreement.
So I really havent changed my opinion too much at this stage.

The cost of subscribing is trivial.
My reading is that Stephen Hunter QC for metlifecare told the court that shareholders needed to vote because the costs were high.
In contrast Galbraith said no point voting now as may get a different offer-eg a higher bid !(this insinuated to me that they may be wanting to make a lower bid)

[Raz]

The cost of subscribing is trivial.
My reading is that Stephen Hunter QC for metlifecare told the court that shareholders needed to vote because the costs were high.
In contrast Galbraith said no point voting now as may get a different offer-eg a higher bid !(this insinuated to me that they may be wanting to make a lower bid)

Yes the high bid part made me chuckle :)

[winner69]

Gave Kim Ellis a ring but he’s otherwise occupied I was told - no doubt basking in the glory of getting a great price for shareholders.

So I sent him an email recommending Beagle Market Analytics Ltd to do the independent advisors report.

Even that company might fall for the old ‘framing’ trick - value already been signalled as between $6.60 to $7.20 - must come close to that or no pay wink wink


Whoever they did appoint covered their bases with a wider range with the $6.50 to $7.65 that they apparently came up with.

What independent valuations never address is ‘why do some companies generally trade on low value?’. They always assume it’s a perfect world out there and Z should always equal X times Y

[Arthur]

To time short to do the research, but even if the court finds for MET what power will they have to enforce a foreign company to comply? Thanks to anyone that knows and shares

[winner69]

Current share price $4.44 seems about right if no takeover on cards.

Maybe this a way to get a fair expected values target price for year end -

40% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.50
20% chance of price falling to $4.00

So all up ‘expected return’ of $5.15 covering all bases

Suppose worth while staying on board and hoping like hell we get $6.50 sooner than later

[BlackPeter]

Current share price $4.44 seems about right if no takeover on cards.

Maybe this a way to get a fair expected values target price for year end -

40% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.50
20% chance of price falling to $4.00

So all up ‘expected return’ of $5.15 covering all bases

Suppose worth while staying on board and hoping like hell we get $6.50 sooner than later

Well, given my average buy in price of $3.17 I guess I can live with all of your scenarios ... just wishing I had bought a bit larger parcel at that stage :):

[Beagle]

Current share price $4.44 seems about right if no takeover on cards.

Maybe this a way to get a fair expected values target price for year end -

40% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.50
20% chance of price falling to $4.00

So all up ‘expected return’ of $5.15 covering all bases

Suppose worth while staying on board and hoping like hell we get $6.50 sooner than later

For what its worth I modelled up a range of scenario's just the other day and ascribed what I perceived as the percentage scenario's to them and got an answer within 5 cents of yours's.

[winner69]

Well, given my average buy in price of $3.17 I guess I can live with all of your scenarios ... just wishing I had bought a bit larger parcel at that stage :):

Well done BP ....fraction lower than me

The past is the past and historical eh .... i was looking at what returns might get from here in the future

Isn't that what we should be doing rather than testing on ones laurels

[winner69]

For what its worth I modelled up a range of scenario's just the other day and ascribed what I perceived as the percentage scenario's to them and got an answer within 5 cents of yours's.

OMG we agree on something

MET a dog stock and always will be .....but hoping a punt on a takeover over $6 happens soon. Only reason to 'invest' in MET

[Beagle]

OMG we agree on something

MET a dog stock and always will be .....but hoping a punt on a takeover over $6 happens soon. Only reason to 'invest' in MET

I was just as shocked as you :lol:...but I am not so sure on your second sentence. I think they have done well to weather the Covid 19 crisis with FY20 forecast underlying profit little changed from last year.

[dubya]

Wow. Big sell at the end of the day.

11634

[bull....]

hammer time - had to happen sucked in the punters those arb players

[JohnnyTheHorse]

Couldn't help myself at that price...

[jonu]

Wow. Big sell at the end of the day.

11634

End of May rebalancing. It happens across the board.

[bottomfeeder]

I might end up owning more than I originally expected. Have to average down my last purchase of 3k at $4.45. Ouch.

[thegreatestben]

I think I'll take some more if the price remains on Tuesday

[peat]

the fortitude weakening already for some !

one of the real issues for holders is of course if the company is prevented from moving ahead in deference to the bidders interests. This could be more than a distraction and put an actual hold on plans. Which may not be so bad because the world is a bit slower moving now and, as Mansons are doing with The Herald block , its actually not too bad to hold off major development while risks remain quite real.

So I think we need patience loads of it even. move on now if yer gonna.

[Beagle]

MSCI index rebalance at close today Peat. Lots of stocks got moved around a fair bit. Agree that chasing EQT puts some constraints on MET in terms of its development but also concur that at this present time that's not really a big deal and actually might make very good sense. You're dead right, a lot of patience will be required.

[dreamcatcher]

Couple of large sell parcels for Tuesday 202K @ $4.47 and 300K @ $4.53

[peat]

MSCI index rebalance at close today Peat. Lots of stocks got moved around a fair bit. Agree that chasing EQT puts some constraints on MET in terms of its development but also concur that at this present time that's not really a big deal and actually might make very good sense. You're dead right, a lot of patience will be required.

Yes I see RYM down 6% and OCA up 6% nice for that fund who was mentioned recently as shorting and longing these respectively.

[peat]

announcement today would seem to be bad news in that Directors are not gaining what they sought and the reneger has!
However , not sure if it makes much difference really ?

[Joshuatree]

I will put it in as you forgot. Doing their tortuous ABC's.

Shareholder Approval to be Sought for (https://www.nzx.com/announcements/354049)

"Metlifecare confirms that it will instead hold a meeting of shareholders in mid-July 2020 to seek endorsement of the Board’s intention to continue legal action on behalf of shareholders challenging the validity of APVG’s notice to terminate the SIA, signed on 29 December 2019.Metlifecare filed a Statement of Claim in the High Court on 15 May 2020, seeking orders to compel APVG and EQT Infrastructure IV fund to fulfil their contractual obligations under the SIA and an Equity Commitment Letter. "

The High Court has set an expedited court timetable for the dispute, with the trial scheduled to commence in Auckland on 23 November 2020.

Metlifecare Chair Kim Ellis said: “The necessary legal action to compel APVG and EQT to fulfil their contractual obligations under the SIA has already secured the public support of a significant proportion of our biggest investors. At next month’s meeting, the Board of Metlifecare will also be seeking formal endorsement of shareholders to continue pursuing litigation options to enforce the SIA and implement the Scheme.”

[Beagle]

Doesn't really make any difference to the strength or otherwise of the argument to be had in the high court commencing 23 November 2020, in my opinion.
I note in the learned Judge's opinion it will be unrealistic of the parties to expect a judgement before the end of January 2021. (certain to be a reserved decision for very careful consideration) because the case involves complex legal, economic and accounting matters. I would therefore not expect a judgement until February 2021. The chances of the decision being appealed should not be overlooked and the additional timeframe and costs involved needs to be considered too.

An appeal to the Court of appeal and by the time it takes for them to make their reserved decision could eat up most or all of 2021 and then there's still the possibility of another appeal to the Supreme court going well into 2022 and in all this time if MET are trying to get them to agree to the takeover they have to continue to run the company in accordance with the terms and conditions specified within the scheme implementation agreement which means no dividends. So, all accrued earnings right through to potentially even as late as sometime in 2023 could flow through to EQT as part of their $7 acquisition. Don't you just "love" the legal system :rolleyes:

I will have some hard questions for the legal advisors and directors at the forthcoming meeting. Is there any chance of a settlement at a lower price is one question I will be asking. I want to know an estimated timeframe if this gets appealed all the way to the Supreme Court and some idea of costs. I am starting to wonder if its worth it to be quite honest about it. If earnings for the next two years are going to disappear in legal costs is there any point ?

[King1212]

Great master Beagle...! When is the meeting..?

Can u also ask whether they will do a buyback?

[winner69]

Wonder how long the “... support of a significant proportion of our biggest investors.” will be maintained ....I’d hazard a guess their patience might start to wane.

What happens if shareholders dont ‘endorse’ this brave stand

Heads you win, tails you don’t lose ...hmmmm

[Beagle]

Great master Beagle...! When is the meeting..?

Can u also ask whether they will do a buyback?

"Metlifecare anticipates dispatching the Notice of Meeting and associated materials to shareholders in the week commencing 8 June 2020, with the meeting to be held in mid-July, 2020". They won't be able to do a share buy-back and take legal action at the same time, such actions are precluded under the scheme implementation agreement.

Winner, I wonder if everyone is aware that this could easily drag on into 2022 with appeals all the way to the Supreme Court ? Its going to be necessary to take a "dogged" approach with this one. Wonder if legal action considering all the implications for the ongoing operation of the company within the tightly defined parameters of the scheme implementation agreement will require a special resolution, i.e a 75%+ vote in favour or just a general resolution ?

Just as well according to the best academics at Harvard these MAC disputes normally end up being settled out of court.

[Cyclical]

Winner, I wonder if everyone is aware that this could easily drag on into 2022 with appeals all the way to the Supreme Court ? Its going to be necessary to take a "dogged" approach with this one. Wonder if legal action considering all the implications for the ongoing operation of the company within the tightly defined parameters of the scheme implementation agreement will require a special resolution, i.e a 75%+ vote in favour or just a general resolution ?

When you put it like that, prospects suddenly don’t look so rosey, do they? Certainly plenty to ponder.

[Beagle]

When you put it like that, prospects suddenly don’t look so rosey, do they? Certainly plenty to ponder.

Yes there is. One question someone has to ask at the forthcoming shareholders meeting. Is it possible to just settle this thing at a somewhat lower price ? Is there any tangible sign APVG wants to do a deal or is this totally adversarial and even acrimonious ? I think I might send the directors a list of questions I will be asking before the meeting so they'll have time to prepare.

[traineeinvestor]

A final court decision forcing an offer at $7.00 sometime in 2022 is a significantly worse deal than the original offer of $7.00 in early 2020 – if I understand the terms of the offer MET can't pay dividends during that time and/or shareholders have lost about 2 years of use of the $7.00 per share.

Would a court judgement in METs favour make provision for those losses? If not, I'd rather see cash damages.

[peat]

its still probably one of the most likely ways of turning $4 into $7 though. which is 20% pa. even if it takes 3 years.
Shame about the dividends being deferred for holders along the way though, that seems like an inequitable situation if the Reneger has become fully adversarial. They're still there of course for the patient....

[Beagle]

A final court decision forcing an offer at $7.00 sometime in 2022 is a significantly worse deal than the original offer of $7.00 in early 2020 – if I understand the terms of the offer MET can't pay dividends during that time and/or shareholders have lost about 2 years of use of the $7.00 per share.

Would a court judgement in METs favour make provision for those losses? If not, I'd rather see cash damages.

Lots of questions and very few answers at this stage. Knowing lawyers a little bit they will be very reluctant to even give a vague estimate on the costs of this matter so it might just be best to ask what are legal fees incurred to date ? and then multiply that by about 10.

One wonders what has happened to the other two parties that expressed interest in taking over MET at one stage ? Have they disappeared completely or is there some chance of resurrecting one of those possible deals ? More questions...I really am full of them. What is the point of continuing development activities on a pathetic development margin of just 13%...if the directors think their shares are really worth $7 why not just spend the development money on buying the shares back ? $7 / $4.35 = 61% return, quite obviously a vastly higher return on capital than 13%.

The market is disappointed in MET because the directors need to wake up and smell the coffee.
Bottom line, there are reasons the shares trade at such a deep discount to asset backing and the directors need to acknowledge their part in that and let shareholders know what other alternative ways there may be to accrue value to shareholders than going on a multi year legal goose chase that will likely cost many tens of millions of dollars in legal fees with a very uncertain outcome. End of rant...I feel a bit better now lol

[bottomfeeder]

I don't believe this prevents MET from paying a dividend. The agreement only states no dividend can be paid up to a certain date, which I think was 15 May. It would be a bit on the nose if they were able to settle this thing at $7 plus get all the profits for a further two years. This is what will come under the successful outcome for MET. Specific performance as well as damages which will include costs and increased value from 15 May to date of final settlement. I think the bidder should be quite concerned that if they lose it will be quite costly. Big risk by them. They will be negotiating furiously right now. Of course this won't hit the news because of the commercial sensitivity.

[Beagle]

Perhaps you are right. Without digging into the clauses it would appear to be a breech of the principles of natural justice that a further two years worth of accrued earnings should be handed to the acquirer at the original takeover price of $7. Good to see some fighting talk, thanks...I needed that. Disc: Holding on grimly and digging in for a long drawn out fiasco.

Auckland house prices look surprisingly strong https://www.landlords.co.nz/article/976516939/market-teeters-on-cliff-edge-qv?utm_source=ST&utm_medium=email&utm_campaign=ShareTrader+AM+Update+for+Wednesday+3 +June+2020
https://www.stuff.co.nz/life-style/homed/real-estate/121695527/first-home-buyers-in-christchurch-keen-despite-covid19-economic-downturn

Barfoots reporting Auckland medium house sale price up 1.6% in May 2020 on April 2020 and 7.5% on May 2019. https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12336753

One thing, by the time this does see the light of day in court APVG claims of massive destruction in asset value and earnings may look like a complete fictional nightmare fantasy that only exists in their own minds !

[winner69]

Beagle asked “One wonders what has happened to the other two parties that expressed interest in taking over MET at one stage ? Have they disappeared completely or is there some chance of resurrecting one of those possible deals”

I think there weren’t any other serious interest ..made for a good story though

[macduffy]

Beagle asked “One wonders what has happened to the other two parties that expressed interest in taking over MET at one stage ? Have they disappeared completely or is there some chance of resurrecting one of those possible deals”

I think there weren’t any other serious interest ..made for a good story though

Agreed, winner. Any serious suitor would have surfaced by now.

[Bjauck]

Agreed, winner. Any serious suitor would have surfaced by now. Maybe the classic tactic of exaggerating other interest, to squeeze more dough out of the one party that was actually seriously interested.

As our own Barfoot Beagle has posted - real estate prices are amazingly still going up (well the median sales prices at least.) So the impact on MET is less likely to be at the level required to trigger the MAC.

England recently reported its biggest monthly drop in house prices for 11 years. So perhaps in NZ the rise may be due to a combination of a more successful Covid policy, a healthier economic outlook prior to Lockdown and fewer active real estate purchasers reliant on servicing mortgages from incomes affected by the Covid measures? However it could be that the drop in interest rates is most successful in NZ at supporting real estate rather than the economy - at least initially?

[850man]

So I wonder how focused MET are on running and building the business versus pursuing APVG through the courts? If their case is successful, they will get $7, if they put in a heap of effort to make MET more successful in the interim, they still get $7. While they are pursuing APVG and saying the deal needs to proceed, can they even entertain another offer from elsewhere should one come along or have they essentially precluded this by their stance that it's already a done deal with APVG? As noted, a lot of time before there is a ruling and it may not be in their favour, that's a lot of time they could be and should be capitalising on the still booming real estate market here.

[Cyclical]

One thing, by the time this does see the light of day in court APVG claims of massive destruction in asset value and earnings may look like a complete fictional nightmare fantasy that only exists in their own minds !

Yes, I was thinking that APVG hold all the cards at this point and it's in their interests to drag this out as long as possible...kind of a heads they win (sale called off), tails they still win as they get more for their $7 in two years time when there is a conclusion. However, as you point out, the longer this does drag on, the weaker their MAC argument gets, assuming we keep Covid at bay and property doesn't come back too significantly. Given this, here's hoping both parties can come to the negotiating table and reach an agreement.

I'm currently not in favour of lining lawyers pockets for the next 2 years. I'd rather see MET move on and concentrate on sorting out the business. With OCA's price heading north the way it is, MET is soon going to be the only RV stock trading (well) south of NTA, and chasing this deal is likely to become a long term handbrake on the company and SP.

[Beagle]

Yes, I was thinking that APVG hold all the cards at this point and it's in their interests to drag this out as long as possible...kind of a heads they win (sale called off), tails they still win as they get more for their $7 in two years time when there is a conclusion. However, as you point out, the longer this does drag on, the weaker their MAC argument gets, assuming we keep Covid at bay and property doesn't come back too significantly. Given this, here's hoping both parties can come to the negotiating table and reach an agreement.

I'm currently not in favour of lining lawyers pockets for the next 2 years. I'd rather see MET move on and concentrate on sorting out the business. With OCA's price heading north the way it is, MET is soon going to be the only RV stock trading (well) south of NTA, and chasing this deal is likely to become a long term handbrake on the company and SP.

That hits the nail directly on the head. Why spend tens of millions per annum for the next few years on lawyers when they could spend that on buying the shares back at a deeply discounted price with guaranteed accrual of value to remaining shareholders ? They've already lost round one of this battle at significant cost to themselves plus APVG costs with costs to be sought by APVG and determined by the Judge if the parties can't agree.

As anyone with an understanding of the legal system knows, its not just one's own costs one has to be concerned about. If you lose you're up for a big chunk of the defendant's costs too !

[bottomfeeder]

Not necessarily. If you lose you don't automatically have to pay the costs of the other party. MET, were the subject of the cancellation of a contract by the bidder. So even if they lose, as they had an entitlement to go to court, I can't see them having to pay the costs of the bidder. I see the bidder should have been aware that when they cancelled the contract, that there was a potential for legal action.

[Beagle]

Not necessarily. If you lose you don't automatically have to pay the costs of the other party. MET, were the subject of the cancellation of a contract by the bidder. So even if they lose, as they had an entitlement to go to court, I can't see them having to pay the costs of the bidder. I see the bidder should have been aware that when they cancelled the contract, that there was a potential for legal action.

You obviously didn't read the last part of the Judge's ruling the other day. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354049/323728.pdf
See point 38. MET lost this round...I read that as MET is liable for a chunk of APVG's costs...but I am not a lawyer and not pretending to be one so that's yet another question for the forthcoming shareholder meeting. How much might MET be up for in terms of APVG's legal costs if they lose ?

Obviously they won't know that so a better way to gain some insight is to ask for total legal costs so far. I would be surprised if it wasn't already in the several million area.

As I see it, the best hope for MET is that real estate data and between now and mid November shows APVG's assertion that "the sky is falling" is proved wrong and that MET's unit sales are so good between now and then that this matter reaches a negotiated settlement out of court.

[bottomfeeder]

You obviously didn't read the last part of the Judge's ruling the other day. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354049/323728.pdf
See point 38. MET lost this round...I read that as MET is liable for a chunk of APVG's costs...but I am not a lawyer and not pretending to be one so that's yet another question for the forthcoming shareholder meeting. How much might MET be up for in terms of APVG's legal costs if they lose ?

Obviously they won't know that so a better way to gain some insight is to ask for total legal costs so far. I would be surprised if it wasn't already in the several million area.

As I see it, the best hope for MET is that real estate data and between now and mid November shows APVG's assertion that "the sky is falling" is proved wrong and that MET's unit sales are so good between now and then that this matter reaches a negotiated settlement out of court.

I don't read it the way you do. MET has lost nothing. While the allocation of costs has been mentioned no decision of the court has been made. Nothing I have seen in either the agreement nor the court result affects the success of MET of coming out of this clean. I see APVG as trying anything to unbalance the MET effort (grasping at straws would be more accurate). Its a shame this is going to take twelve months to be near resolution.

[nevchev]

At least 12 months!.Holders voting early with there feet and heading for the door.We like our companies to stand up for themselves but drawn out legal disputes are a bummer.GLTA.

[Beagle]

I don't read it the way you do. MET has lost nothing. While the allocation of costs has been mentioned no decision of the court has been made. Nothing I have seen in either the agreement nor the court result affects the success of MET of coming out of this clean. I see APVG as trying anything to unbalance the MET effort (grasping at straws would be more accurate). Its a shame this is going to take twelve months to be near resolution.

Lets agree to disagree and move on and discuss possible timetable. In the honorable Judge's ruling he says that parties should not expect a decision before the end of January 2021, lets say February 2021. We know Synlait's original high court decision was handed down in November 2018 and after being appealed to the Court of appeal is presently being heard in the Supreme court. Assuming the Supreme court hand down their reserved decision in say August 2020 that's 21 months from the date of the original high court decision until the supreme court hand down their decision.

If we assume this is a typical timeframe for a significant commercial matter to traverse the 3 upper layers of the judicial system then if one party or the other appeals all the way from the high court to the court of appeal and the supreme court this could drag into February 2021 + 21 months = November 2022 plus whatever time it takes to take enforcement action through European courts against EQT seeing as it is likely APVG is merely a shell company being supported by them. So we could get our $7 sometime in 2023 if this runs the full legal appeal process. Hmmm

I merely post this so people can focus their minds as to whether they really want to have that sort of dogged determination or not. On the other hand they could reach a settlement before it makes it to the high court in November 2020. I note Balance has stopped reminding us on a regular basis that a settlement is the most likely outcome so I presume he has lost patience already and sold out.

[Baa_Baa]

I am sensing that a certain @Beagle whose self professed lack of patience but profoundly expressed dogged determination to hold for the long term if the case is lost, is in a mental conflict, or perhaps has sold already?

Honestly who can be bothered tying up capital in a serial under-performer and market sector pariah on the off chance some day a year or so away, they may get a capital gain windfall, or be left holding the baby?

Opportunity cost anyone?

[traineeinvestor]

I suppose another way of looking at MET is to ask whether it is a good investment at current prices even if MET loses the case against APVG after incurring a few million in legal fees and gets a cost award for a similar amount awarded against them at the end of the day.

[Beagle]

Clinging on with dogged determination. I am hoping for a negotiated settlement before this goes to court because the expert academic boffins at Harvard are on record as saying these messy MAC disputes usually settle out of court. This suggests to me a settlement in the six dollar something range is more likely than not.

I think they are worth at least $4.30 even if they lose.

[peat]

I suppose another way of looking at MET is to ask whether it is a good investment at current prices even if MET loses the case against APVG after incurring a few million in legal fees and gets a cost award for a similar amount awarded against them at the end of the day.
one needs to see the whole picture being that its not too bad an investment at these prices - not too bad at all and probably even has room for a margin as one of our old favourite investors says.

It is true that it has shown to be not that great a company but all company's can be a reasonable investment. The fact there's something at play here makes the case sweeter than it otherwise would be, and enough to tip the scales in its favour I reckon.

I cant believe you guys are all wussing out already. If The Reneger sees this it will strengthen their resolve.

[Beagle]

I'm not a pussy. Dogmatically hanging in there :cool:

[bottomfeeder]

I'm not a pussy. Dogmatically hanging in there :cool:
Me too. Wont buy anymore unless they get below $4.

[dreamcatcher]

I've also re-invested a second time and continue holding even though no divvies for 12months but suspect NONE of the retirement lot will be paying divvies anyway. That possible magic $7 been a great 64% incentive............. Otherwise imo well priced

[bull....]

bull stood alone that metlife would get no where in demanding the takeover , everyone was so bullish pushing the narrative and slowly and surely they are all folding.

[winner69]

Current share price $4.44 seems about right if no takeover on cards.

Maybe this a way to get a fair expected values target price for year end -

40% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.50
20% chance of price falling to $4.00

So all up ‘expected return’ of $5.15 covering all bases

Suppose worth while staying on board and hoping like hell we get $6.50 sooner than later

Updated this after recent events

10% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.40
50% chance of price falling to $3.60

‘Expected’ target price in a years time $4.25

BaaBaa mentions opportunity cost ...should be considered as well

Maybe the mantra is now MET, heads you might win, tails you might lose a bit ....hmmm

[winner69]

bull stood alone that metlife would get no where in demanding the takeover , everyone was so bullish pushing the narrative and slowly and surely they are all folding.

These ‘battles’ often end in tears eh bull....esp when parties are so DOGmatic

[Snoopy]

I encourage everyone to read the termination notice from EQT. My initial thoughts are that irrespective of everything else, the wage subsidy application will hold up in court (allowing legal termination of the contract).

Either EQT or the board are in big trouble! Either way, the lawyers are going to be doing well.


Not a MET shareholder and not looking to get in. But from the sidelines this case has eerie parallels with my own investment 'adventure;' into Arrium on the ASX, the scene of my biggest ever sharemarket loss.

Arrium was an iron ore exporter, and financial viability centered on getting production costs down to a certain level as iron ore prices globally reduced. I took the gamble that they would be able to do this.. It was a touch and go situation and I knew what I was getting into, but I judged that the gap between production costs and market price would remain positive. In the end the margin did hold positive However the company was tipped into receivership anyway, because the directors formed a view that was honestly and reasonably held that the company might not be able to keep operating with a positive margin and that if that happened then the company could be trading while insolvent.

Whatever actually happens to MET profits, the fact hat the MET board applied for the wage subsidy indicated that the MET board believed a 30% fall in revenue from pre-covid levels had occurred. The bidders would be quite within their rights to see this as an honestly and reasonably held position -at the time-, regardless of whether the expected falls in revenue actually continued into the future. As it turns out, it looks like the projected fall in revenue of 30% was an over-reaction. But that is irrelevant. As long as the bidder had a view that was honestly and reasonably held at the time, a view conformed by the actions of the MET board applying for the wage subsidy, then the bidders are off the hook as I see it, I am not a legal expert. I am just speaking from a position of being on the receiving end of what I see as an analogous position.

SNOOPY

[Leftfield]

Thanks for posting Snoopy. Like you I've been watching the MET posts from the sidelines.

IMHO it is a very risky proposition to base ones investment on the possibility of a favourable legal outcome.

Whatever the likely outcome, there is a risk that the legal action will be protracted and divert the attention of the Board from other key business decisions.

GLH (Disc don't hold.)

[dreamcatcher]

Lets see where these Retirement stock go

$1.37.............Arvida Group
$6.34.............Summerset Group
$13.35...........Ryman Healthcare
$0.94.............Oceania Healthcare
$4.28.............Metlifecare

[Beagle]

Updated this after recent events

10% chance of takeover at $6.25 (mid point $6.00 to $6.50 - I just love midpoints)
10% chance of market love taking it $5.00
30% chance price hangs around $4.40
50% chance of price falling to $3.60

‘Expected’ target price in a years time $4.25

BaaBaa mentions opportunity cost ...should be considered as well

Maybe the mantra is now MET, heads you might win, tails you might lose a bit ....hmmm

The first version of your probability analysis made a lot more sense to me.

[winner69]

Lets see where these Retirement stock go

$1.37.............Arvida Group
$6.34.............Summerset Group
$13.35...........Ryman Healthcare
$0.94.............Oceania Healthcare
$4.28.............Metlifecare

Probably this way

[winner69]

If I was a resident in a MET village I’d be concerned about having an owner who doesn’t really want to be the owner and maybe just wants to get as much cash as possible out of them ...rather then providing high standards of care/living

[winner69]

Lost in translation

[Beagle]

Back to puppy school for me to learn how to bark more respectfully and at half volume.

[winner69]

No context to make meaningful

[Beagle]

https://www.youtube.com/watch?v=v0AdIdM_x8E He's fat like me too lol

Anyway...speaking of dog's in the naughty corner...I suppose one has to accept the possibility that MET might hang around its current share price level until there's a resolution one way or the other. That could get a bit painful with other stocks recovering strongly but on the other hand the relative value to other sector participants just keeps getting better and better.

[macduffy]

If I was a resident in a MET village I’d be concerned about having an owner who doesn’t really want to be the owner and maybe just wants to get as much cash as possible out of them ...rather then providing high standards of care/living

Valid point, winner. Nothing like some heavy litigation to take management's eye off the ball.

:(

[bottomfeeder]

If you think any of the retirement operators are in business for altruistic reasons, perhaps you shouldn't be an investor in the markets. You should invest in PEB.

No doubt litigation will absorb some time and effort, but just where are you going to buy a share that is selling at 60% of NTA. The dividend yield is so low only because its historic and reflects only a half of a dividend. If anyone seriously thinks that with all of the requirements as to a takeover, that have not yet been met and also may not be able to met, that MET is pursuing a takeover, do not realise that such action is necessary to obtain full damages and costs. APVG still needs to raise capital as well. As I said before, APVG will be furiously establsihing a board of settlement, and will start negotiating for a settlement, maybe not in the next few months, but it will happen. As I said before, I dont want a takeover, it is shortsighted to want $7-00 as this sector will be one of the best able to weather the coming inflationary movements of mega proportions. I am looking for a return to NTA within a year and a half and a takeover within 3 years of $14-00. The pirates of the Carribbean were still poor even though they had so much gold for free in their coffers, the more they stole the more expensive things got. Inflation. Lastly we are all very complacent with COVID now that Level 1 is nigh. If there is a second wave, MET at this price will satisfy me very well thankyou. Exuberant you think. OK then Oh me Oh my its going to go to $3.00, hahahaha.

[macduffy]

If you think any of the retirement operators are in business for altruistic reasons, perhaps you shouldn't be an investor in the markets. You should invest in PEB.

I don't know who this remark is aimed at but equally I don't think anyone is under any illusions as to what's needed for a successful business. First and foremost are satisfied customers. Taking management's focus away from that goal to concentrate on litigating a possible takeover will see that $3.00 shareprice a distinct possibility. Oh, and I'm a MET shareholder and far from a newcomer to the markets.

[winner69]

If you think any of the retirement operators are in business for altruistic reasons, perhaps you shouldn't be an investor in the markets. .

Question then. ..what are retirement operators (or any business) in business for?

[bottomfeeder]

Question then. ..what are retirement operators (or any business) in business for?
Profits. Now now my posts are a bit tongue in cheek. After all I would hate someone to take me seriously and invest on my comments. Does anyone really know what the market will bring.

[winner69]

Profits. Now now my posts are a bit tongue in cheek. After all I would hate someone to take me seriously and invest on my comments. Does anyone really know what the market will bring.

Yes bottomfeeder .....but better put as maximising long-term benefits for all people and nature.

[flyer]

https://www.youtube.com/watch?v=v0AdIdM_x8E He's fat like me too lol

Anyway...speaking of dog's in the naughty corner...I suppose one has to accept the possibility that MET might hang around its current share price level until there's a resolution one way or the other. That could get a bit painful with other stocks recovering strongly but on the other hand the relative value to other sector participants just keeps getting better and better.

Yes Beagle, I been looking at this scenario this weekend in opportunity cost of holding. Since 1 Apr the price is up 13.91% and it may sit around this figure for a month or 2, wheras like you said other stocks are rising e.g. from the same date some other stocks percentage increases OCA (37.68%). PPH (107.65%) AIA (32.82%) THL (125.96%) AIR (86.36%) just to name a few. I guess with Met is it a FOMO on a successful conclusion.

I did this exercise as MET and ATM (only up 10.14%) are 2 of my largest holdings and 2 of the smaller increases thus my portfolio never seems to grow much in recent times. Makes me rethink what I am doing with some of my larger holdings.

[Beagle]

My sense and hope is that $4.30 will just keep getting better and better value compared to the rest of the sector, as it has in recent weeks...the real estate market will be quite stable and hopefully we remain on top of Covid 19 and all this makes a negotiated settlement later this year more likely than not.

Next month's shareholders meeting will be a good opportunity to get a better handle on this. I hope all shareholders take the trouble to attend and ask every single question that's on their minds.

[King1212]

New valuation

KordaMentha has assessed the current value of Metlifecare shares in the range
NZ$5.80 to NZ$6.90 per share - slightly below the consideration of NZ$7.00
per share that APVG agreed to pay in the SIA. The valuation range using the
discounted cashflow method is NZ$5.79 to NZ$7.23.

[winner69]

Beagle will disagree with KM “The DCF methodology is commonly used by parties within the retirement village industry.”

We might not hear much from beagle today as he pulls out the good bits of this meaty report (and leaving the many not so good bits spread around the kennel)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354271/323998.pdf

[macduffy]

Thanks, winner. I think we all need to read this. Incidentally, DCF is only one of several methods used by KM to value MET, as is the norm with these valuations.

[winner69]

Thanks, winner. I think we all need to read this. Incidentally, DCF is only one of several methods used by KM to value MET, as is the norm with these valuations.

Yeah I realise that …. but disappointed they didn't use the Beagle Mixed Multiples Methodology

One chart sums it up

[peat]

looks good to me, supporting the realistic (almost) nature of the transaction , it just indicates APVG were unfortunate in their timing and although it considers the recession points out this hits developers more.
Meaningless though really eh? coz bias and vested interest.

[Beagle]

Beagle will disagree with KM “The DCF methodology is commonly used by parties within the retirement village industry.”

We might not hear much from beagle today as he pulls out the good bits of this meaty report (and leaving the many not so good bits spread around the kennel)

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354271/323998.pdf

YAWN - The lazy overfed beagle slept in this morning and has yet to digest this but I see the mid point is $6.35 which is very close to what I have suggested for some time is about where I expect a negotiated settlement of this in due course but I am sure there must be something in there worth barking about so will get on to it shortly.

[Balance]

YAWN - The lazy overfed beagle slept in this morning and has yet to digest this but I see the mid point is $6.35 which is very close to what I have suggested for some time is about where I expect a negotiated settlement of this in due course but I am sure there must be something in there worth barking about so will get on to it shortly.

As markets stabilize and the torrent of printed money flood the markets, driving deposit rates towards zero - EQT will certainly have cause to change their mind and come back to the negotiating table.

$6.00 to $6.50 - my pick of where the price will be set to be presented to shareholders.

[winner69]

Whole sector up today with SUM leading the way at the mo

MET needs a bettermstory.

[Balance]

Whole sector up today with SUM leading the way at the mo

MET needs a bettermstory.

Breached $4.50 and heading higher .

Sadly, like a few other NZX stocks - MET sp is now driven by ASX & overseas players, and with ASX on holiday today - it's time to go and enjoy L1 (unofficially at this stage).

[Balance]

Whole sector up today with SUM leading the way at the mo

MET needs a bettermstory.

$4.60 and going higher - good enough gains to exit for you, W69?

Take the gains and leave MET with its questionable (to you) valuation & outlook behind? 🤷🏻*♂️

[bottomfeeder]

Let the good times roll.

[Beagle]

As markets stabilize and the torrent of printed money flood the markets, driving deposit rates towards zero - EQT will certainly have cause to change their mind and come back to the negotiating table.

$6.00 to $6.50 - my pick of where the price will be set to be presented to shareholders.

I agree. I read the whole valuation report which seems fair and reasonable.

[Cyclical]

I agree. I read the whole valuation report which seems fair and reasonable.

Winner will be disappointed you didn't throw him a bone ;)

[Balance]

Winner will be disappointed you didn't throw him a bone ;)

Between Beagle & W69, both of whom I respect, it is a painful exercise to watch the to & fro! 🙈

[Beagle]

Between Beagle & W69, both of whom I respect, it is a painful exercise to watch the to & fro! ��

Its a sign of a good friendship when two old dogs feel they can bite each other now and again to make sure the other one stays on track :D

[Balance]

Its a sign of a good friendship when two old dogs feel they can bite each other now and again to make sure the other one stays on track :D

Well said! 👍

[Beagle]

Well said! ��

There might have been a bit too much biting lately though :lol:

[peat]

I'm heading off for Sth Is tour tomorrow so have a few things to arrange. So havent read the whole report but of course am quite pleased that the market is finally seeing potential here.
But I keep getting shocked at how long it takes ... (although not as long as justice) It sure looks like MET will become a three way for me !!

[fish]

I agree. I read the whole valuation report which seems fair and reasonable.

Thanks so much for sharing such good information with all of us-I was a bit slow off the block buying a few weeks ago because I was overstocked with Oceania.
Big gain today and IMO a long way to go yet !

[winner69]

$4.60 and going higher - good enough gains to exit for you, W69?

Take the gains and leave MET with its questionable (to you) valuation & outlook behind? 🤷🏻*♂️



Don’t they say let the winners run

What did Butch’s modelling say a while ...ALWAYS GOOD BUYING at 323 or something around that mark

[Beagle]

Well done mate, you're a Winner :cool:

[winner69]

That table on Page 43 must have wrong numbers in it

MET Earnings Growth at 2% pa over last 3 years compared to median 17% of the 4 others in sector

[Beagle]

That table on Page 43 must have wrong numbers in it

MET Earnings Growth at 2% pa over last 3 years compared to median 17% of the 4 others in sector

Was a disappointing timeframe. If they had of taken the 5 years average MET would have been 15% per annum CAGR.

Surely this is good for the chances of a negotiated settlement with EQT ! https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12338098

Lets all just agree on the mid point of the valuation range being $6.35 and be done with the legal proceedings.

[winner69]

Beagle ...even you would have to agree MET recent financial performance has been abysmal

Something for new owners to fix ....other wise we are doomed if current directors and management left on charge

[winner69]

Fancy UBS selling heaps last week ...or dont UBS announcements mean much at all

[Beagle]

Beagle ...even you would have to agree MET recent financial performance has been abysmal

Something for new owners to fix ....other wise we are doomed if current directors and management left on charge

Abysmal is not the adjective I would use. Its been okay in a flat Auckland market but I agree management need to do a LOT MORE to drive value in this business starting with massive ongoing share buy-backs if this deal doesn't happen. If they make their FY20 $88m underlying profit target incorporating 4 months of Covid 19 surely you'd have to concede they've done okay and been pretty resilient ?

I think they need to "do a warehouse" and take some serious cost out of head office and also cut down on a lot of other wastage. It won't entirely surprise me if at the vote next month they don't get the required 75%. Telling APVG to go away and lets get back to driving value and growth for N.Z. shareholders over the long run has some merit to it in my opinion.

[Longhaul]

I think they need to "do a warehouse"

I would really like this phrase to catch on :lol:

[Panda-NZ-]

Repairs may be easier to do now that the workers are available and allows "met" to negotiate lower repair costs.

[Beagle]

https://www.oneroof.co.nz/news/38003 Real estate looking strong. Covid free, all good.

[Snow Leopard]

Just voted against MET litigating.

Then they can get on with adding some real value to this company...

...or probably not, they have been fairly useless at it so far.

[Beagle]

I hear you. Unless it can be resolved quickly, which seems unlikely, as a shareholder, I would also rather MET focus on running the business. I would like to see MET allocate capital to buying back shares at a massive discount instead of building new villages. A large buy back could drive NTA well over $7.00.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354271/323992.pdf
Makes for very sobering reading.

[sb9]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/354271/323992.pdf
Makes for very sobering reading.

They seem to be spending too much on this issue rather than on their actual business.

[Beagle]

Could spend 2 years in the N.Z. legal system running through the full gambit of the appeals process and another couple of years in European courts with enforcement action, (assuming they get a judgment in their favour which isn't subsequently successfully appealed here). How many tens of million each and every year will be spent on legal costs ?
Why not just spend that money buying back the shares at dirt cheap prices instead ?

I think I will also vote against this.

[winner69]

Could spend 2 years in the N.Z. legal system running through the full gambit of the appeals process and another couple of years in European courts with enforcement action, (assuming they get a judgment in their favour which isn't subsequently successfully appealed here). How many tens of million each and every year will be spent on legal costs ?
Why not just spend that money buying back the shares at dirt cheap prices instead ?

I think I will also vote against this.

What happens if shareholders don’t ‘ratify, confirm or approve’ ......is it a case of forgetting all about the deal and walking away?

[Jay]

Is it either someone(s) knows something and hence the price rise or the latest valuation pushing it along -
Not complaining though, up about 35% so far on my very modest holding, just a little behind the other one going great guns at present in this sector

[peat]

Is it either someone(s) knows something and hence the price rise or the latest valuation pushing it along -

its just the market I think- all boats rising on the tide

[Beagle]

What happens if shareholders don’t ‘ratify, confirm or approve’ ......is it a case of forgetting all about the deal and walking away?

Yes. As I understand it both parties walk away and accept their own costs in this fiasco. As I see it MET could easily sink tens of millions a year down the rat hole of QC's legal costs and EQT could hide behind the European courts judicial system. They might as well spend $50m a year on a buy-back of the companies own shares than line the lawyers pockets for many years to come don't you think ? Who knows what the legal costs will amount too ? They're not giving any information on that so one has to assume the very worst.

[peat]

Read this article NZH paywall
Paul McBeth: Metlifecare's Nordic deal - when schemes of arrangement go bad https://nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12338007


Schemes of Arrangement will lose value if we don’t force EQT to honour the deal

i guess as shareholders we don’t care that much about the Schemes in general but if you dont stand up for your rights no one else will

i think the costs mentioned by you Beagle are overstated
How much can QC’s cost even if we hire two (like EQT) surely not 25 million per year each

[Beagle]

I'm going to take a wild guess here because the rumour mill suggests about $2,000 - $2,500 per hour for QC's and suggest there's perhaps 2000 billable hours to get this through the initial high court hearing for the QC involved. That's $4-5m. Then there's the team at the law firm supporting him doing the research. They might have a team of 6-10 researching all precedents from other countries around the world and their hourly rate might average $700 and they might put in 1000 hours each.

The above is an extremely speculative and wild guess but it comes to around $10-12m so yes, $50m was an emotionally charged guess (without any thought), my bad....but who knows and no-one is giving a quote and nobody knows how long this could go on for and what the costs and processes are for enforcement through the Luxemburg courts assuming after all appeals MET had a decision in its favour.

Yes if MET roll over it will diminish the attractiveness of future scheme implementation agreements but that's no bad thing. I always preferred a proper takeover with 90% approval required anyway.

What is a crying shame is that the 10 July meeting is a virtual one. There is no need for that given we are in level 1. In my experience with virtual meetings they deliberately choose not to answer some really hard written questions. I was really looking forward to going along and asking some really searching questions and getting a feel for the directors competency in handling them.

My gut tells me MET are going on a VERY long and VERY expensive goose chase here...but I guess if MET doesn't try to at least initiate proceedings in the first instance there is NO chance of a settlement so I suppose its worth a go.

[peat]

I'm going to take a wild guess here because the rumour mill suggests about $2,000 - $2,500 per hour for QC's and suggest there's perhaps 2000 billable hours to get this through the initial high court hearing for the QC involved. That's $4-5m. ...


.but I guess if MET doesn't try to at least initiate proceedings in the first instance there is NO chance of a settlement so I suppose its worth a go.
thx for refining your estimate Beagle

yeh I think we need to go through the motions to force a response and increase the chances of a re-deal

its totally ridiculous these costs, why would we pay a team of researchers when you’re already paying 2500 an hour

ive read Bleak House by Dickens and the law is an ass and I always try to avoid lawyers but here it is at least about a show of strength (echo and the Bunnymen song too in case you care)

[winner69]

Virtual meetings are all one way .....no real interaction with shareholders

Dont think they will hear the beagle bark

[fish]

Virtual meetings are all one way .....no real interaction with shareholders

Dont think they will hear the beagle bark

My feeling is its just a formality.
The big shareholders are voting for and will carry along enough votes to easily obtain 75% of votes cast.
After this I suspect the parties will agree to go to mediation-both parties have good reason to avoid a long uncertain legal battle.
A lower price will be agreed-not less than 10% of the original offer-which is the lowest offer I would consider accepting.

[Beagle]

My feeling is its just a formality.
The big shareholders are voting for and will carry along enough votes to easily obtain 75% of votes cast.
After this I suspect the parties will agree to go to mediation-both parties have good reason to avoid a long uncertain legal battle.
A lower price will be agreed-not less than 10% of the original offer-which is the lowest offer I would consider accepting.

I hope you're right. No point in me working myself up into a lather over this. The big boys will carry the day. I'm just going to go with the flow and hope this gets settled in due course.

[bottomfeeder]

Looks like Credit Suisse has been reading my posts, LOL

[DarkHorse]

Holymoly Beagle...even in the pre-digital age when I was at law school we managed to find most of the key precedents on an issue in a few hours or so...:t_up:

[baaantom]

https://www.afr.com/street-talk/bgh-capital-puts-get-out-of-jail-card-to-abano-20200611-p551i2 (Paywall)

Looks like Abano's bidder is back in talks. May put some additional pressure on APVG.

[fish]

Holymoly Beagle...even in the pre-digital age when I was at law school we managed to find most of the key precedents on an issue in a few hours or so...:t_up:

What do you think will happen?

[bottomfeeder]

Down 17 then up 3. Very nervous market at the moment. Funds selling down, but price being maintained. No one knows what is going on. Direct being a half an hour behind doesn't help.

[winner69]

NBR says MET should refund the wage subsidy seeing they keep raving on well they are doing.


But few individuals and companies have no moral compass so rort the system.

I was told the story about a joiner whose been flat out since lockdown eased and doing bloody well he said and the wage subsidy helped and he kept his 7 employees on. Taken out one of free loans from IRD and bought himself a new Ute. He’s a clever guy with no moral compass and won’t charge any of his completed jobs until next week ...that way he can claim poverty and get a extension to the wage subsidy. He says he’s going to keep the extra subsidy money in the bank and pay the free loan back next year....loves the govt as he’s got a spanking new Ute.

[bottomfeeder]

I have a restaurant tenant, who are not opening on Wednesday and Thursday, no doubt wanting to qualify for the continued wage subsidy. Government way too generous.

[850man]

NBR says MET should refund the wage subsidy seeing they keep raving on well they are doing.


But few individuals and companies have no moral compass so rort the system.

I was told the story about a joiner whose been flat out since lockdown eased and doing bloody well he said and the wage subsidy helped and he kept his 7 employees on. Taken out one of free loans from IRD and bought himself a new Ute. He’s a clever guy with no moral compass and won’t charge any of his completed jobs until next week ...that way he can claim poverty and get a extension to the wage subsidy. He says he’s going to keep the extra subsidy money in the bank and pay the free loan back next year....loves the govt as he’s got a spanking new Ute.

They should never have claimed the wage subsidy in the first place. Talk about giving APVG fuel to exercise the MAC clause because of Covid19!

You are correct that there are many businesses out there that have taken more then their fair share of government handouts to line their pockets.

[nztx]

https://www.afr.com/street-talk/bgh-capital-puts-get-out-of-jail-card-to-abano-20200611-p551i2 (Paywall)

Looks like Abano's bidder is back in talks. May put some additional pressure on APVG.


Not MET, I know ... but with ABA - here's what happened on AFR's Street Talk effort 25 Sep 2019 last year -

https://www.nzx.com/announcements/341554

ABANO RESPONDS - SPECULATION IN AUSTRALIAN FINANCIAL REVIEW

[bottomfeeder]

If there is a second wave arising from the latest outbreak, this could kybosh the whole process of specific performance, due to a subsequent valuation confirming the original MAC reliance shown to be correct.
I have taken a reduction in holding, and partial profit just in case. Better to make some profit. This is the difficulty of being a trader, it levels the profitability, rather than holding out for the last cent.
Only sold down 20%

[Balance]

Nicely, nicely - up she goes. Just the way some of us like it.

Thread being so quiet, one suspects that many have lost faith and sold out?

[winner69]

Nicely, nicely - up she goes. Just the way some of us like it.

Thread being so quiet, one suspects that many have lost faith and sold out?

Might hit 5 bucks this week

But be good if they sorted this and I got $6.34

[Joshuatree]

Go you good thing.:sleep:

[Beagle]

Nicely, nicely - up she goes. Just the way some of us like it.

Thread being so quiet, one suspects that many have lost faith and sold out?

Beagle still here but barked so much about this one I have gone "horse" :)

[Joshuatree]

I once saw a brown horse with COW painted on it in white at Gunns camp store near the Hollyford track ,so can relate to you here.:D

[bottomfeeder]

If there is a second wave arising from the latest outbreak, this could kybosh the whole process of specific performance, due to a subsequent valuation confirming the original MAC reliance shown to be correct.
I have taken a reduction in holding, and partial profit just in case. Better to make some profit. This is the difficulty of being a trader, it levels the profitability, rather than holding out for the last cent.
Only sold down 20%

I couldn't have got that more wrong. Still holding 20k. And will hold to the bitter end.

[Balance]

Beagle still here but barked so much about this one I have gone "horse" :)

Haha - good one, Beagle! 😁

[Food4Thought]

I couldn't have got that more wrong. Still holding 20k. And will hold to the bitter end.

Plenty of potential here.

Don't be frustrated.... because all I know (which isn't a lot) if markets crash again, your cash will be very helpful.

I bought in. Like the possibility for this company at the price I paid (2 weeks ago).

Still feel there could be another mighty good correction ... anyway, could should would.... cash wasn't looking so flash and quality assets do (at the right cost for risk/reward I am after)

Both this one and OCA look great long term and beat myself with a large paddle when I didn't buy OCA near the bottom.
Then again ... currently done ok with both and happy for them to drop off 20% from current price for my pain threshold.

Happy share hunting

[Scrunch]

So who else has seen this older (27 April) link below?
https://www.eqtgroup.com/news/Press-Releases/2020/asia-pacific-village-group-to-terminate-scheme-implementation-agreement-with-metlifecare/

They would appear to have an evidence base for a valuation fall of >$200m so only need to prove at least half the attested fall and the MAC condition has been met.

Their evidence base includes "APVG has engaged two global property valuation firms, a “big 4” accounting firm, a prominent New Zealand economist and leading New Zealand and international legal advisers, including two of New Zealand’s leading Queen’s Counsel." That sounds like a pretty strong evidence base.

I had been thinking, perhaps a takeover will happen and that's what the market is thinking with the share price zooming up. A read of the link above and I'm back into the the takeover won't happen camp.

[fish]

So who else has seen this older (27 April) link below?
https://www.eqtgroup.com/news/Press-Releases/2020/asia-pacific-village-group-to-terminate-scheme-implementation-agreement-with-metlifecare/

They would appear to have an evidence base for a valuation fall of >$200m so only need to prove at least half the attested fall and the MAC condition has been met.

Their evidence base includes "APVG has engaged two global property valuation firms, a “big 4” accounting firm, a prominent New Zealand economist and leading New Zealand and international legal advisers, including two of New Zealand’s leading Queen’s Counsel." That sounds like a pretty strong evidence base.

I had been thinking, perhaps a takeover will happen and that's what the market is thinking with the share price zooming up. A read of the link above and I'm back into the the takeover won't happen camp.

I cannot see how engaging firms and people to try and prove your allegations can be called an evidence base

[Leftfield]

So who else has seen this older (27 April) link below?
https://www.eqtgroup.com/news/Press-Releases/2020/asia-pacific-village-group-to-terminate-scheme-implementation-agreement-with-metlifecare/

They would appear to have an evidence base for a valuation fall of >$200m so only need to prove at least half the attested fall and the MAC condition has been met.

Their evidence base includes "APVG has engaged two global property valuation firms, a “big 4” accounting firm, a prominent New Zealand economist and leading New Zealand and international legal advisers, including two of New Zealand’s leading Queen’s Counsel." That sounds like a pretty strong evidence base.

I had been thinking, perhaps a takeover will happen and that's what the market is thinking with the share price zooming up. A read of the link above and I'm back into the the takeover won't happen camp.

Thanks for posting.....always good to see another perspective. (I don't hold MET)

[Scrunch]

I cannot see how engaging firms and people to try and prove your allegations can be called an evidence base

Because if this doesn't settle before going to court, the documents these firms supplied will be tabled in court as evidence as to why it is reasonable to assume NTA fell by $100m. I'm not sure if they have to prove the value has remained over $100m down, i think it may be just that it has fallen by that amount when the MAC was triggered.

[macduffy]

I cannot see how engaging firms and people to try and prove your allegations can be called an evidence base

Quite right. Let's see if the other party play the same, or bigger, game!

[bottomfeeder]

Subsequent results will be the telling evidence.

[Beagle]

So who else has seen this older (27 April) link below?
https://www.eqtgroup.com/news/Press-Releases/2020/asia-pacific-village-group-to-terminate-scheme-implementation-agreement-with-metlifecare/

They would appear to have an evidence base for a valuation fall of >$200m so only need to prove at least half the attested fall and the MAC condition has been met.

Their evidence base includes "APVG has engaged two global property valuation firms, a “big 4” accounting firm, a prominent New Zealand economist and leading New Zealand and international legal advisers, including two of New Zealand’s leading Queen’s Counsel." That sounds like a pretty strong evidence base.

I had been thinking, perhaps a takeover will happen and that's what the market is thinking with the share price zooming up. A read of the link above and I'm back into the the takeover won't happen camp.

REINZ data is evidence, not opinion. Going off memory, medium house prices went up 4.9% in the 3 months to March 2020 and have since fallen about 2%. Overall I doubt there has been much change since December 2019 when the NTA was $7.00 a share.

[King1212]

$5 soon!!!

[baaantom]

$5 soon!!!

$5 close 😁

[winner69]

$5 close 😁

Next stop $5.50 .....in a few weeks

[Beagle]

Next stop $5.50 .....in a few weeks

Good to see it with a 5 handle but be careful mate, remember what we said about OCA not going under $1 again :blush:

[King1212]

strong buying lately....!!

[macduffy]

strong buying lately....!!

Matched by equally strong selling, at least today. Shareprice hasn't moved.

[peat]

Matched by equally strong selling, at least today. Shareprice hasn't moved.

but in relation to overall market it held up well.

[Balance]

Next stop $5.50 .....in a few weeks

Heading there - $5.09 this morning.

Happy days, everyone! :t_up:

[Balance]

Heading there - $5.09 this morning.

Happy days, everyone! :t_up:

$5.11 now.

So quiet!

Why do I get the feeling that many have sold out of their shares?

[Joshuatree]

Not selling (atp) , not counting, just smiling.:)

[BlackPeter]

$5.11 now.

So quiet!

Why do I get the feeling that many have sold out of their shares?

No way ... might reconsider when we pass the $6, though ;) - but who knows, maybe they are good for another surf after that?

[bottomfeeder]

I'm not selling. After all what would you do with the money. Everything is up, term deposits are down. Nothing going on here go suggest a large and sustained drop in SP.

[peat]

nows about the time we bring out those Jesse Livermore quotes about making money by sitting.

Edit. Just FTR I am kinda bearish overall though.

[Beagle]

Heading there - $5.09 this morning.

Happy days, everyone! :t_up:

https://www.youtube.com/watch?v=Es6NTTripvs Patient puppies will get a good feed, just like patient shareholders in MET :)

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12343718

Auckland prices down just 1.6% since 25/3/20. Don't forget they were up in the 3 months to the end of March by 4.9% so currently stand 3.3% higher than 31/12/19 values. Not exactly the cataclysmic fall EQT are expecting is it !

[trader_jackson]

https://www.afr.com/street-talk/metlifecare-rejects-revised-eqt-takeover-offer-20200629-p5575x

I don't think there was ever a mention of a revised offer from EQT?
And if there was, I'm fairly sure there was no price revealed...
(I could be wrong as haven't followed that closely but happened to see this and thought I would post it)

[Beagle]

Any price mentioned t.j. ?

[trader_jackson]

No...

Points of Note:It is understood:
Metlifecare approached EQT to try and work out a revised deal but the price was too high for the private equity investor.
EQT returned with another bid which would have allowed some of Metlifecare's shareholders to roll some of their shares into the bid vehicle - Metlifecare said that bid was too low.
One of the key sticking points in not engaging with the deal is Metlifecare chairman Kim Ellis, who doesn't want to settle for a price much below $NZ7.

[peat]

nice one trader
an instant pop
dont mind if i do!

[winner69]

Big shareholders a bit pissed off with MET people from all accounts as well.

Probably NZ Superfund one of them ...they been trying to rid themselves of this dog for a while.

[winner69]

NBR got story how a few shareholders (hedges) going to scupper the EQM

[peat]

amazing that some of this hasnt been disclosed to ALL shareholders dont you think?

[winner69]

Kim’s on the ropes they say ...whatever that means

[peat]

Kim’s on the ropes they say ...whatever that means
unlike many of your posts today that actually does have some meaning to me

[winner69]

Wish they’d all act like grown ups and just settle on $6.25 and make it disappear for a few years ...that way we’ll never get to know how useless MET is

[winner69]

unlike many of your posts today that actually does have some meaning to me


Muhammad Ali was pretty good when on the ropes .....didn’t stop him winning

[peat]

Muhammad Ali was pretty good when on the ropes .....didn’t stop him winning
yeh it doesnt mean you're out
but it does mean you're not in control.

[Beagle]

NBR got story how a few shareholders (hedges) going to scupper the EQM

https://www.nbr.co.nz/story/desperate-hedge-funds-threaten-metlifecare-egm

Excerpt "The tortuous takeover process for retirement village operator Metlifecare has taken another twist, with a handful of shareholders threatening to call an extraordinary general meeting for a vote on ousting directors". Just settle the thing for the mid point of the new valuation range being $6.35 and be done with it for goodness sake !

A good thing that at least EQT and MET are talking, in my opinion.

[winner69]

I am not going to concede

[Beagle]

He looks old, tired and well past his prime, (like a certain chairman at THL, SUM and SKC eh Winner ;) ). Not surprised that desperate hedge fund managers who are underwater by millions are keen to see him gone.

[Jay]

Looks like it might finish in the positive today and here I was thinking is it time to get out what with the above about no deal... as yet

[moimoi]

Is there any factual evidence of the "handful of shareholders".?

[Beagle]

NBR mentions that the Chairman is well aware of "talk" of an extraordinary meeting to remove directors. People can decide for themselves whether that's evidence per se or not.

Seems to me MET have approached EQT seeking a deal and have been lowballed with a heavily revised offer which MET have rejected.
Where it goes from here is anyone's guess !

[winner69]

The ‘Heads you win, tails you win’ guy says - I would be shocked if this got done below $6...$MET.NZ

[winner69]

If I remember correctly the takeover of Waste Management was long drawn out affair before Ellis (and the Board) caved in.

Ellis spent years telling the market that Transpacific didn’t get a ‘bargain’ ...plenty of criticism about the price obtained and it always came across as Ellis justifying what they did

Balance might have better memory than me.

[Balance]

If I remember correctly the takeover of Waste Management was long drawn out affair before Ellis (and the Board) caved in.

Ellis spent years telling the market that Transpacific didn’t get a ‘bargain’ ...plenty of criticism about the price obtained and it always came across as Ellis justifying what they did

Balance might have better memory than me.

Gee - really taxing the memory bank here, W69!

All I can recall (from my own perspective) was selling out on the market at close to the takeover price, while the battle raged between institutional shareholders who wanted a proper takeover deal (cash & 100% takeout at a higher price) than the scrip (Transpacific) and scheme of arrangement 'merger'.

One of the advantages of being a small shareholder who can easily get out vs the big institutions.

Did not get to have a second bite at Waste Management however, unlike Metlife here.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10382330

[Balance]

NBR mentions that the Chairman is well aware of "talk" of an extraordinary meeting to remove directors. People can decide for themselves whether that's evidence per se or not.

Seems to me MET have approached EQT seeking a deal and have been lowballed with a heavily revised offer which MET have rejected.
Where it goes from here is anyone's guess !

Having observed how 'leaks' find their way into the AFR and other newspapers over the decades, I believe it will be EQT (refer 1 below) who has the real motivation to leak the news that MET directors have rejected their revised (obviously lower) offer.

This ties in with the NBR also separately reported that institutional shareholders (refer 2 below) are agitating for an EGM to get the directors to accept the revised offer.

Observations:

1. EQT or its agent was most likely the one to leak the news that they had pulled the previous offer which caused the sp to crater.

2. MET directors have the support* of the institutions to take EQT to court to seek specific performance of the takeover offer by EQT. Unless there is a revised offer acceptable to the institutions, there is no reason for the institutions to agitate for the directors to be removed.

------------------------------------- GAME ON! -----------------------------------------------------

* Shareholders support directors taking EQT to court : https://www.nzx.com/announcements/353446

[moimoi]

Exactly..

And difficult to imagine that the pensions funds and institutional investors providing the funding to EQT funds are doing so to fund risky and expensive legal campaigns down in the South Pacific...

Settlement beckons...

[Balance]

Exactly..

And difficult to imagine that the pensions funds and institutional investors providing the funding to EQT funds are doing so to fund risky and expensive legal campaigns down in the South Pacific...

Settlement beckons...

So next question : What would be an acceptable offer to the institutional shareholders?

A figure of $6 has been put out there (refer The Australian) which could have only come from EQT.

For the hedge funds who bought hundreds of millions of dollars worth of MET shares as an arbitrage play (gone wrong), $6 would be perfectly acceptable as they need liquidity to get out of their huge position. Hence, the agitation once they are made aware of the revised offer imo.

For other shareholders however, EQT's revised offer suggests EQT know they are on the back foot in the litigation and there could be serious reputational as well as financial damage if they lose.

Well, the adage that the first offer is never the last and final offer applies - so look for some sort of amicable settlement at around $6.30 to $6.50?

[limmy]

If EQT loses, in the event of a court case, wouldn't they have to pay some form of penalty ?
i.e. Pay the $7 per share + compensation.
Will we, as shareholders get some benefits from this compensation ?

[Balance]

If EQT loses, in the event of a court case, wouldn't they have to pay some form of penalty ?
i.e. Pay the $7 per share + compensation.
Will we, as shareholders get some benefits from this compensation ?

If there is any compensation, shareholders would of course get the benefit - via a special dividend for eg.

Doubt vey much we will see this playing out in the court now.

The leaks coming out say that the two parties (but especially EQT) are moving towards a settlement.

[Balance]

As an aside, MET should be getting ready to make an announcement about what’s happening behind the scenes in the interest of continuous disclosure.

If history is any guide however, the directors are likely to keep quiet and we will probably only get an update when a deal is announced?

So - be there or miss out!

[Beagle]

So next question : What would be an acceptable offer to the institutional shareholders?

A figure of $6 has been put out there (refer The Australian) which could have only come from EQT.

For the hedge funds who bought hundreds of millions of dollars worth of MET shares as an arbitrage play (gone wrong), $6 would be perfectly acceptable as they need liquidity to get out of their huge position. Hence, the agitation once they are made aware of the revised offer imo.

For other shareholders however, EQT's revised offer suggests EQT know they are on the back foot in the litigation and there could be serious reputational as well as financial damage if they lose.

Well, the adage that the first offer is never the last and final offer applies - so look for some sort of amicable settlement at around $6.30 to $6.50?

The mid point of the most recently revised independent valuation is $6.35 and I think most people would be happy to accept that and call it a day

[Balance]

The mid point of the most recently revised independent valuation is $6.35 and I think most people would be happy to accept that and call it a day

The hedge funds will be more than happy at $6.00, that's for sure.

Remember that some of the hedge funds bailed out when EQT pulled its $7 offer and they were willing to bail out as low as $3.15!

The challenge will be to get the major NZ institutions (1/3rd of total shareholdings) to accept a revised lower offer.

Will need W69 to keep pushing the negative narrative to get them to accept a lower offer? :p

[winner69]

The mid point of the most recently revised independent valuation is $6.35 and I think most people would be happy to accept that and call it a day



You and your mid points crack me up ....no logic in it all

But hoping like hell that on this occasion mid points are what the outcome is....even if it proves you’re right

[Balance]

You and your mid points crack me up ....no logic in it all

But hoping like hell that on this occasion mid points are what the outcome is....even if it proves you’re right

Sell side getting rather thin as the institutions hold off awaiting the outcome of the revised offer.

SP spiking quickly past $5 in recent days a little suspicious, don't you think?

[Beagle]

You and your mid points crack me up ....no logic in it all

But hoping like hell that on this occasion mid points are what the outcome is....even if it proves you’re right

Mid points in theoretical valuations which have a range are the most likely to be more correct than any other under standard deviation analysis. Might have to get my steam powered abacus out though because I suspect that the statistics to be released mid July by arguably the most authoritative report, (REINZ monthly medium sales stat's by region) will show medium Auckland and Bay of Plenty house prices are ostensibly unchanged or slightly higher in June 2020 than they were in December 2019. That might be the fly in the ointment that shows no reduction on the $7 price is warranted. Wonder how your mates at the Super fund will feel then ?

As for me I am happy to roll over and accept $6.35 as long as they give this fat dog a good tummy rub and pat and tell me what a good dog I am.

[Balance]

Mid points in theoretical valuations which have a range are the most likely to be more correct than any other under standard deviation analysis. Might have to get my steam powered abacus out though because I suspect that the statistics to be released mid July by arguably the most authoritative report, (REINZ monthly medium sales stat's by region) will show medium Auckland and Bay of Plenty house prices are ostensibly unchanged or slightly higher in June 2020 than they were in December 2019. That might be the fly in the ointment that shows no reduction on the $7 price is warranted. Wonder how your mates at the Super fund will feel then ?

As for me I am happy to roll over and accept $6.35 as long as they give this fat dog a good tummy rub and pat and tell me what a good dog I am.

Friend of mine sold their place in St Heliers at auction last week and very very happy with the price obtained - well above CV and well above reserve. In fact, the auction had to be brought forward by two weeks as a buyer put in a drop dead offer above reserve after just the first open home!

Property is nice - family home (aged decor) with a swimming pool (which needs refencing) and apparently there is a really bad shortage of such properties (family homes with land) on the market - plenty of NZers returning back from overseas with $$$$.

So yes, I think you are bang on with your assessment that median Auckland prices are holding steady.

[Balance]

Sell side getting rather thin as the institutions hold off awaiting the outcome of the revised offer.

SP spiking quickly past $5 in recent days a little suspicious, don't you think?

I see both parties are declining to comment on whether talks are taking place.

Logic says that talks are then taking place.

Announcement by Friday?

[JohnnyTheHorse]

Kind of amazing that NZX doesn't request a disclosure be made with these types of news articles being published (especially behind paywalls... and yes I have access to these so I'm not complaining from that front!) It is clearly price sensitive as shown in price movements after publishing.

At the same time though it's the NZX so I'm not surprised at all.

[JeremyALD]

It is quite mind boggling these shares ever went down to $3.30. I'm glad i got some at that price, but kind of feeling dumb for not getting more. It really was ridiculous.

As for the offer, I don't really care. I'd take anything over $6.25, but they need to decide quickly whether to renegotiate or get on with running the business. I've decided there's no point dragging this out, it benefits no one.

[williethewaiter]

Friend of mine sold their place in St Heliers at auction last week and very very happy with the price obtained - well above CV and well above reserve. In fact, the auction had to be brought forward by two weeks as a buyer put in a drop dead offer above reserve after just the first open home!

Property is nice - family home (aged decor) with a swimming pool (which needs refencing) and apparently there is a really bad shortage of such properties (family homes with land) on the market - plenty of NZers returning back from overseas with $$$$.

So yes, I think you are bang on with your assessment that median Auckland prices are holding steady.

I'm in that area and looking to change up - it's insane at the moment. We've been told by multiple agents to expect a range for ours that is around $300k more than pre-covid.

From what I've seen and experienced in the last few weeks while wife drags me to open homes- massive shortage of 4 bedroom family homes and lots of buyers. Have a mate in Western Springs / Kingsland area selling who is seeing huge foot traffic through the door in open homes and lots of registered bidders already. There really is a post-covid premium at the moment.

Is interesting though as anything sub-2 is flying out the door.. anything in the mid-high 2's people are a lot more nervous so slower to sell and feeling that some discounting can be had if you're cashed up. New builds in the bays have dropped from pre-covid 2.4 to 1.8 to 2.2 as developers looking to move them. Apartments seem to be going well - new build right across the road from us that we thought would struggle to sell sold penthouse for north of 3 - and it was nothing special. Older owners looking to downsize are getting frustrated as an apartment cost is now what they're selling their family home for.

Only place that isn't selling in the bays is the one right next door to where Oceania is building their village!