MET - Metlifecare - one for the fundies?

[Beagle]

The tip for Fearless originated from Jardens ...and it ran nowhere ....got to pick your advisors better I reckon

Should have asked one of the more senior of the other 10 people working on the deal. They would have had a better tip for you, BUY SUM MET :D

[winner69]

Short term pain, perhaps, but MET value is now being recognised and the shares will be priced more realistically in future.

The ABA and STU value were once recognized when offers were made ......what happened next?

[Beagle]

The ABA and STU value were once recognized when offers were made ......what happened next?

Difference is MET have hard assets i.e. land and buildings that are independently valued each year. You're comparing apples and plums, (this dog has never much liked plums).

[macduffy]

The ABA and STU value were once recognized when offers were made ......what happened next?

Not a good comparison there, winner. ABA and STU were and are not operating in growth industries as MET is, with other companies like RYM, SUM and OCA providing a reference point.

[Beagle]

Not a good comparison there, winner. ABA and STU were and are not operating in growth industries as MET is, with other companies like RYM, SUM and OCA providing a reference point.

Trader Jackson will be upset you didn't mention Arvida there as well :D

[winner69]

Should have asked one of the more senior of the other 10 people working on the deal. They would have had a better tip for you, BUY SUM MET :D

...is there a deal to be working on today?

[winner69]

Difference is MET have hard assets i.e. land and buildings that are independently valued each year. You're comparing apples and plums, (this dog has never much liked plums).

...but both STU and ABA Boards had lofty expectations as to what they reckon their company was worth and said NO ..what happened next?

[King1212]

I agree with Beagle....MET is different ..they have hard assets..n generate good revenue

[pierre]

Closed at 638 - not too far away from the offer price! To quote Winner "That's good".

[Beagle]

...but both STU and ABA Boards had lofty expectations as to what they reckon their company was worth and said NO ..what happened next?
No sure what your angle is on this one. Completely different industries, the relevance is what ?

Every other relevant industry player trades at a minimum premium to NTA of at least ~ 20%, most a heck of a lot more mate. Not sure how you could realistically suggest the board of MET could be considered to have lofty expectations to simply expect a minimum bid of at the very least current NTA as at 31 December 2019 ? How is that price expectation unrealistic especially given there are three interested parties ?

Good to see patience starting to reap rewards, up 26 cents today. The more patient one is, the more rewards will come, in my opinion.

[winner69]

Closed at 638 - not too far away from the offer price! To quote Winner "That's good".

Yes that’s good - especially so on pretty strong volumes.

[couta1]

Hey winner these a better bet than that dog horse you mentioned, never had a win at the races as big as the gain on my MET today, just as well I'm not a gambler.

[bohemian]

Twenty six trades at 6.38 in the minute of trade, what's that about?

[Balance]

Twenty six trades at 6.38 in the minute of trade, what's that about?

Someone wants stock to be 'well positioned' for a takeover.

Remember, first bid is never the last bid.

[Beagle]

Someone wants stock to be 'well positioned' for a takeover.

Remember, first bid is never the last bid.

^^^^^ Agree 100%.

[macduffy]

I'd agree but would change the "never" to "rarely".

[Snow Leopard]

Of course, if the deal has to start with a 7 then it may well not happen at all.

Worth repeating.

[winner69]

Worth repeating.

Snowie, but there’s 3 interested parties who want Metlifecare

[bohemian]

Would anyone be willing to buy more at this stage?

[Beagle]

Would anyone be willing to buy more at this stage?

The volume on Friday was four times higher than average for this stock and the price went up 26 cents. I think that speaks for itself.

[King1212]

Too late now....it will another offer coming up this Monday....

[couta1]

Too late now....it will another offer coming up this Monday.... I doubt it, will be in the new year.

[Beagle]

I doubt it, will be in the new year.

I think that's more likely BUT on the other hand given the size of the deal it wouldn't surprise me if one of Jarden's top investment bankers, (to try and earn a really HUGE Christmas bonus) isn't trying to broker price agreement between the buyer and major shareholders this weekend and an improved offer could be forthcoming before Christmas. Maybe, but I am not holding my breath for that. The interested party will know they're not the only one interested and $7.25 is still a very good price for the buyer (for current strong market conditions and very good prospects for 2020 and beyond in this sector).

At $7.25 they are buying a company that has grown earnings at an average rate of 15% per annum over the last five years and for most of that time the Auckland market was flat. They'd be paying about 15 times earnings for 15% average growth, a PEG ratio of just 1.0. That is cheap no matter how you slice and dice it but with somewhat (I put this as kindly as possible, "uncharismatic") leadership in recent times major shareholders might be happy to accept $7.25. I think that's the price the deal gets done or very close to that. Its possibly worth a bit more but there has to enough meat left on the bone for the acquirer to chew on otherwise they won't bite.

[winner69]

The volume on Friday was four times higher than average for this stock and the price went up 26 cents. I think that speaks for itself.

Take out 1 million sale at a discount (to Quit?) nothing unusual about Friday’s volume

More (Underlying) volume on Thursday prior to the announcement

[Beagle]

Fact remains, it closed up 26 cents on four times the usual volume. Monday could be very interesting or very boring, one or the other lol.

[Beagle]

I think that's more likely BUT on the other hand given the size of the deal it wouldn't surprise me if one of Jarden's top investment bankers, (to try and earn a really HUGE Christmas bonus) isn't trying to broker price agreement between the buyer and major shareholders this weekend and an improved offer could be forthcoming before Christmas. Maybe, but I am not holding my breath for that. The interested party will know they're not the only one interested and $7.25 is still a very good price for the buyer (for current strong market conditions and very good prospects for 2020 and beyond in this sector).

At $7.25 they are buying a company that has grown earnings at an average rate of 15% per annum over the last five years and for most of that time the Auckland market was flat. They'd be paying about 15 times earnings for 15% average growth, a PEG ratio of just 1.0. That is cheap no matter how you slice and dice it but with somewhat (I put this as kindly as possible, "uncharismatic") leadership in recent times major shareholders might be happy to accept $7.25. I think that's the price the deal gets done or very close to that. Its possibly worth a bit more but there has to enough meat left on the bone for the acquirer to chew on otherwise they won't bite.

Spooky possums, the dog's nose for a feed seems to be still working pretty well http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346494/314594.pdf Hopefully the hard working investment bankers at least get Christmas day off to enjoy with their families.

Balance also predicted this correctly and said the first offer is NEVER the last offer. Hat tip to you mate.

Am I reading this right that there's now another party that has placed an indicative takeover offer, thoughts folks ? I highlight the word "and" because it would appear that not only do they have a higher offer from the first credible buyer but there appears to be another offer from a third party, apparently referring to another bidder ?

MET has received a further revised non-binding indicative proposal to acquire MET and has substantially negotiated a scheme implementation agreement (SIA) with a third party. However, the SIA has not yet been executed pending confirmatory financial due diligence.

If there's two active bidders might we get upwards of $7.50 ?

[pierre]

Fact remains, it closed up 26 cents on four times the usual volume. Monday could be very interesting or very boring, one or the other lol.
Trading Halt - round 2 about to start.

[winner69]

Trading Halt - round 2 about to start.

It’s all go this time - hope we know how much by Christmas


Following MET’s announcement on 19 December 2019, MET has received a further revised non-binding indicative proposal to acquire MET and has substantially negotiated a scheme implementation agreement (SIA) with a third party. However, the SIA has not yet been executed pending confirmatory financial due diligence.

[King1212]

Well couta....trading halt....u said u doubted about it?

[couta1]

Looks like were in the money winner, no need to back dog horses over the holiday period, Beagle has earned himself a few more free ski lessons and a trip to the bar of his choice in Queenstown.

[couta1]

Well couta....trading halt....u said u doubted about it? Doubted we would know for sure before Christmas and that's still the case.

[Beagle]

Looks like were in the money winner, no need to back dog horses over the holiday period, Beagle has earned himself a few more free ski lessons and a trip to the bar of his choice in Queenstown.

Friend of mine once said, there's no need to bark when you've got a good dog :) Merry Christmas folks, I am glad a few of my mates joined in the rabbit hunt and proud to lead the hunt on this one. The barking was fierce and justified :) https://www.youtube.com/watch?v=pjz73dv9EEI

[carrom74]

Looks like were in the money winner, no need to back dog horses over the holiday period, Beagle has earned himself a few more free ski lessons and a trip to the bar of his choice in Queenstown.
Sold all my “golden goose” A2 to get into this. I am sure we will all end the year on a high! Thanks to Beagle for the insights. I should admit I got in late... but better late than never!

[weasel]

Am I reading this right that there's now another party that has placed an indicative takeover offer, thoughts folks ? I highlight the word "and" because it would appear that not only do they have a higher offer from the first credible buyer but there appears to be another offer from a third party, apparently referring to another bidder ?
?
I read it as there is an improved offer and some plans for how it would proceed (i.e., lawyers), not another bid.

[Beagle]

I read it as there is an improved offer and some plans for how it would proceed (i.e., lawyers), not another bid.

Thanks, any other opinions on this question I posed folks, see post #1026

So the announcement is due on or before Friday 27 December. Good that's a full trading day and I must admit that's the Christmas present to myself I am most looking forward to unwrapping :)

[Balance]

Someone wants stock to be 'well positioned' for a takeover.

Remember, first bid is never the last bid.

Stood out like a dog's genital appendage when aggressive buying came in after 'rejected' bid.

Sorry, Beagle, but that's an analogy I must use which hopefully compliments rather than offends you.

Directors have said they have obtained valuation in excess of $8.00 + but that's also a negotiating tactic.

The major shareholders hold the key to a bid succeeding and I believe last valuation plus a 5% premium will secure the deal - so $7.30.

[Beagle]

No offence taken mate and agree 100% it was always a given a better offer would be forthcoming. I agree and see it most likely to happen at about the $7.25 I have bene predicting for quite some time now.

SUM might be wondering where the ~ one and a half billion in cash from this potential takeover might be reinvested ? As always I have barked my opinion clearly in the appropriate thread :)

[winner69]

Hope “However, the SIA has not yet been executed pending confirmatory financial due diligence.” means the due diligence has actually been done and just needs the final sign off

[Beagle]

Dotting "I's" and crossing "T's" exercise I would think.
I think the little birdie who told me it must start with a "7" has been right all along.

Lets all play the game of what's the final takeover price and I will donate a chocolate fish to the winner, (a real one at the next gettogether). I might have to buy a few of them in case I get hungry over the holidays and eat the prize :lol:
I am sticking with my long predicted $7.25.

[Joshuatree]

WooHoo. Looks like an xmas feast for all, a very long table needed:t_up:, and xmas crackers provided complete with corny jokes like,

Q"What is small round and brown and sits on a piano stool?

A. "Beethovens last movement."

[Mudfish]

Hope “However, the SIA has not yet been executed pending confirmatory financial due diligence.” means the due diligence has actually been done and just needs the final sign off

Following MET's announcement on 19 December 2019, MET has received a further
revised non-binding indicative proposal to acquire MET and has substantially
negotiated a scheme implementation agreement (SIA) with a third party.
However, the SIA has not yet been executed pending confirmatory financial due
diligence.

I agree with you Winner on how this reads, a deal has been done. Just checking that SIA is the 'how to go about it' stuff? I'm guessing there is significant costs when sorting the logistics? Am I thinking correctly?

[Beagle]

https://www.goodreturns.co.nz/article/976516128/nz-shares-gain-retirement-village-operators-buoyed-by-m-a.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+23+Dec+ 2019
North of $7 being talked about. I'd be very surprised if they hadn't got price agreement already as if they hadn't we wouldn't be in a trading halt.
Puts a rocket under the rest of the sector.

[winner69]

Shareprice at $6.38 about the same as THREE years ago ....and there’s been huge earnings growth since I’m told.

Everybody seems happy to get something a bit over 7 bucks

MET on paper has a well respected Board but on reflection you’d have to say they’ve (and Sowry) been pretty slack when it comes to enhancing shareholder value. Not a good look, I’ll keep their names in mind.

Anyway this dog is probably going to put out of its misery soon.....but I’m happy to have made on it do sort of feel sorry for long term suffering holders who at best have really got as they say a get out jail free card as

[Beagle]

If you take a 3 year perspective there's a lot of disappointed people who bought a house / land in Auckland 3 years ago and I think therein lies the explanation.
The outlook is much better and also the development outlook of MET and that's probably what has stirred interest in this proposed takeover.
Every other stock in the sector is now trading on a minimum of a 25% premium to NTA so private equity are getting a great deal if this goes for $7.25 which virtually no premium to NTA at all. I think you are right, the board and Sowry could have been a lot more proactive and as mentioned recently the buy-back was too little, too late.

Easy enough to find SUM value elsewhere in the sector as a substitute for capital invested here.

[couta1]

Shareprice at $6.38 about the same as THREE years ago ....and there’s been huge earnings growth since I’m told.

Everybody seems happy to get something a bit over 7 bucks

MET on paper has a well respected Board but on reflection you’d have to say they’ve (and Sowry) been pretty slack when it comes to enhancing shareholder value. Not a good look, I’ll keep their names in mind.

Anyway this dog is probably going to put out of its misery soon.....but I’m happy to have made on it do sort of feel sorry for long term suffering holders who at best have really got as they say a get out jail free card as In for a good time and not a long time aye winner, lots of euphoria everywhere at the moment yet Im ever mindful of how quick things can change and an early winter can set in.

[Balance]

In for a good time and not a long time aye winner, lots of euphoria everywhere at the moment yet Im ever mindful of how quick things can change and an early winter can set in.

By all means gather the bountiful harvest in the forests during late summer but keep an eye for the bear (or tiger if you are in Asia!).

[winner69]

No offence taken mate and agree 100% it was always a given a better offer would be forthcoming. I agree and see it most likely to happen at about the $7.25 I have bene predicting for quite some time now.

SUM might be wondering where the ~ one and a half billion in cash from this potential takeover might be reinvested ? As always I have barked my opinion clearly in the appropriate thread :)


In for a good time and not a long time aye winner, lots of euphoria everywhere at the moment yet Im ever mindful of how quick things can change and an early winter can set in.

They say it’s hard to recognise euphoria when you are euphoric ....all will OK ...what can go wrong

[Balance]

They say it’s hard to recognise euphoria when you are euphoric ....all will OK ...what can go wrong

Nothing will go wrong.

Or so they thought when they ploughed into the electricity sector but just a few months ago - Contact at $9 (now $7.18) & TPW at $8.60 (now $7.33).

Happy to take the top off this sector while there's plenty of euphoria around too.

[winner69]

Ironic in some ways that Comvita actually buying their shares back while Metlifecare never got round to it.

Metlifecare Board slack as got a lot to answer for - just as well NZ Superfund have stirred the market up, but then their expectations probably aren’t that high....just happy to get out.

[Beagle]

Nothing will go wrong.

Or so they thought when they ploughed into the electricity sector but just a few months ago - Contact at $9 (now $7.18) & TPW at $8.60 (now $7.33).

Happy to take the top off this sector while there's plenty of euphoria around too.

Metrics are chalk and cheese between the gentailers and retirement companies.

[dobby41]

If you take a 3 year perspective there's a lot of disappointed people who bought a house / land in Auckland 3 years ago and I think therein lies the explanation.
The outlook is much better and also the development outlook of MET and that's probably what has stirred interest in this proposed takeover.
Every other stock in the sector is now trading on a minimum of a 25% premium to NTA so private equity are getting a great deal if this goes for $7.25 which virtually no premium to NTA at all. I think you are right, the board and Sowry could have been a lot more proactive and as mentioned recently the buy-back was too little, too late.

Easy enough to find SUM value elsewhere in the sector as a substitute for capital invested here.

So the outlook for the company is very rosy.
Someone sees value is buying it up (we know that they aren't always right, especially if it turns out to be some private equity outfit) - why don't NZ shareholders see the value?
Why do we always sell for the quick gain rather than look at the big, long picture?
Not a lot of hope, really, for the NZ sharemarket in general,

[Balance]

So the outlook for the company is very rosy.
Someone sees value is buying it up (we know that they aren't always right, especially if it turns out to be some private equity outfit) - why don't NZ shareholders see the value?
Why do we always sell for the quick gain rather than look at the big, long picture?
Not a lot of hope, really, for the NZ sharemarket in general,

Comes down to where the funds released from takeovers are deployed.

NZ is a small market with limited sector diversification so international diversification is desirable and appropriate.

Too much of jumping on the bandwagon type investing in NZ - so need to be careful out there.

Examples in recent times where directors should have negotiated and accepted takeover offers (in part or in whole) :

THL
CVT
STU
FBU

Not all cheese and crackers out there.

[Bjauck]

Comes down to where the funds released from takeovers are deployed.

NZ is a small market with limited sector diversification so international diversification is desirable and appropriate.

Too much of jumping on the bandwagon type investing in NZ - so need to be careful out there.

Examples in recent times where directors should have negotiated and accepted takeover offers (in part or in whole) :

THL
CVT
STU
FBU

Not all cheese and crackers out there.

Yep NZX listed options are getting thin on the ground? So I am guessing some proceeds may be reinvested in other listed Retireent stocks but much of the proceeds will end up in the good old Kiwi favourite - unlisted NZ residential real estate.

[Beagle]

Yep NZX listed options are getting thin on the ground? So I am guessing some proceeds may be reinvested in other listed Retireent stocks but much of the proceeds will end up in the good old Kiwi favourite - unlisted NZ residential real estate.

I don't think so. Government are making it exceptionally tough for residential rental property investors. I think there's a lot of rental property investors looking for the exit door and where will that money go ? REIT's and retirement companies because those sort of people are comfortable with property as an investment class but not at all comfortable with the current political environment where tenants rights are front and central to Govt policy. You can get a good feel for how property investors are currently thinking in this thread https://www.sharetrader.co.nz/showthread.php?11651-Who-d-want-to-be-a-landlord-now&p=782070#post782070

[King1212]

Yup .. couple of my mate sold their rentals..to much red tape and low return...too much work too...now they are in commercial.. returning 6 to 7 present...no works at all...

[Bjauck]

I don't think so. Government are making it exceptionally tough for residential rental property investors. I think there's a lot of rental property investors looking for the exit door and where will that money go ? REIT's and retirement companies because those sort of people are comfortable with property as an investment class but not at all comfortable with the current political environment where tenants rights are front and central to Govt policy. You can get a good feel for how property investors are currently thinking in this thread https://www.sharetrader.co.nz/showthread.php?11651-Who-d-want-to-be-a-landlord-now&p=782070#post782070
Maybe "much of the proceeds" is an overstatement but my guess is that a significant percentage from the takeover will end up in residential real estate.

The government are making it tougher for landlord investors. Although it could be said that it is trying to bring the residential rental market to a standard fit for the 21st Century. Investors still don't need to pay a stamp duty when buying an investment property, unlike Australia and other countries.

Unlike Australia, the NZ share market is small for the size of our population, and fixed interest yields are low. I would suggest that every takeover or loss of an NZX listing results in a diminished share of household assets remaining invested in sharemarket listings with investor residential real estate being a net beneficiary.

I guess it remains to be seen whether the current government's rental and tax changes will make a dent in the long term trend.

Disc: MET shareholder and I would have liked to continue to be a long term holder. I invested in the Retirement Property stocks rather that have the hassle of being a landlord.

[RTM]

I don't think so. Government are making it exceptionally tough for residential rental property investors. I think there's a lot of rental property investors looking for the exit door and where will that money go ? REIT's and retirement companies because those sort of people are comfortable with property as an investment class but not at all comfortable with the current political environment where tenants rights are front and central to Govt policy. You can get a good feel for how property investors are currently thinking in this thread https://www.sharetrader.co.nz/showthread.php?11651-Who-d-want-to-be-a-landlord-now&p=782070#post782070

Yep, I reckon you’re on the money. My sister and brother in law just sold all their rentals....5 I think.... Milford are now investing the proceeds for them. They had mostly newer houses, so weren’t faced with insulation issues. But it just seemed to be getting harder and they could do without the hassle.

[dln]

Who did they sell them to?
Other investors? Owner occupiers?

[Beagle]

Just in the 12 months alone, subsequent to the insulation requirements which has been a MASSIVE multi thousand dollar drama for many landlords we have had a new law ringfencing tax losses from rentals so you can no longer offset those against other income and major new legislation is pending, (discussed in detail in that other thread) giving tenants a whole new suite of rights and major moves to disempower the real owner of the property. This comes on the back of the change to depreciation a few years ago so that people can no longer claim building depreciation.

The legislative framework is such that landlords are entitled to feel that their rights as owners are being very forcefully undermined. With the widespread proliferation of methamphetamines' and damage to property from either gross recklessness or deliberate retribution from disenfranchised tenants and a Government hell bent on a major shift in the balance of power dramatically in favour of the tenant, its now got so tough I can completely understand why people are getting out.

Anyway..back to MET. Where am I going to reinvest proceeds of the MET takeover ? Have started already with SUM and haven't finished yet.
HGH also a safe long term bet and good value and is likewise in a nice uptrend so technically it looks just as good as the fundamentals.
I like investing in good solid companies on compelling fundamentals that are in a nice rising uptrend...much easier swimming with the tide than against it, so to speak.

[tim23]

Just so long overdue changes really, hard to argue with any of these measures...

Just in the 12 months alone, subsequent to the insulation requirements which has been a MASSIVE multi thousand dollar drama for many landlords we have had a new law ringfencing tax losses from rentals so you can no longer offset those against other income and major new legislation is pending, (discussed in detail in that other thread) giving tenants a whole new suite of rights and major moves to disempower the real owner of the property. This comes on the back of the change to depreciation a few years ago so that people can no longer claim building depreciation.

[RTM]

Who did they sell them to?
Other investors? Owner occupiers?

Sorry, don’t know. I will check over Xmas and let you know.
Good question.

[dln]

Thanks.
Will be interesting to see how this plays out on the larger scale.
Does this mean more houses becoming available to potential occupiers (albeit, with affordability still an issue) or are there just bigger players hoovering them up as more rentals for their fleet.

[limmy]

https://www.goodreturns.co.nz/article/976516128/nz-shares-gain-retirement-village-operators-buoyed-by-m-a.html?utm_source=GR&utm_medium=email&utm_campaign=GoodReturns+Market+Report+for+23+Dec+ 2019
North of $7 being talked about. I'd be very surprised if they hadn't got price agreement already as if they hadn't we wouldn't be in a trading halt.
Puts a rocket under the rest of the sector.
Thanks Mr. Beagle, I think your posts must have helped a lot of people see the value of MET, getting in before the halt.

[Beagle]

You're most welcome :) Its been "quite a ride" since the low $4's in October.

[Beagle]

I reckon a takeover target - like it better now Beagle?


Under NTA. Brilliant locations and plenty of brownfield potential. Redevelop sites to include continuum of care and sit back and watch the money roll

From early October 2019.
Thankyou very much. I want to acknowledge that you are the one that started me thinking really, really hard about this one.

[dabsman]

Sweet as mate. You help a lot of people focus on particular shares so I'm glad I helped you in a small way

All I'm worried about at present is the black caps and hoping I didnt miss christmas with the family for them to not turn up!

Seriously I've pored money into retirement shares for 3 years. I just couldnt get over that they have stock levels that gets bigger and bigger each year and each individual item of stock goes up and up in value and the real kicker is they get to sell the same item again and again and again. Imagine that!

MET was simply looked at thru the lens of water-tightness and if they had factored it in then why still the deep discount to NTA. Not really anything more than that. I bought quite a bit at $4.38 so it's been good to me. In fact the last 3 months have been massive with ARV, SUM and RYM and even OCA moving along strongly on top of this one. A few more quarters like this and I can sell up and retire somewhere tropical!

[limmy]

From early October 2019.
Thankyou very much. I want to acknowledge that you are the one that started me thinking really, really hard about this one.
Yes, thanks to you Mr. Beagle and Mr. Dabsman many of us have a merrier Christmas this year.
It is very nice of you to share the opportunity, with the rest of us.

[Yoda]

http://www.sharechat.co.nz/article/8d8fce5e/the-conundrum-of-metlifecare-s-discount-while-peers-trade-at-a-premium.html
the opportunity was fortold 9months ago ...

[Beagle]

http://www.sharechat.co.nz/article/8d8fce5e/the-conundrum-of-metlifecare-s-discount-while-peers-trade-at-a-premium.html
the opportunity was fortold 9months ago ... A good article but to be honest they had been saying that for quite some time.

https://www.marketscreener.com/METLIFECARE-LIMITED-10089401/consensus/
If you scroll down to the timeline of consensus recommendations you'll see that analysts were almost universally very positive about MET from as far back as 2018, (and indeed, not showing on the attached link, for all of 2017 as well), when it was ~ $6.50 and if you followed their recommendations blindly without a thought for technical analysis or an understanding of what the market was really concerned about, (Auckland real estate prices and the need for MET to change their business model towards a more continuum of care), you would have badly underperformed the market and this sector.

The free lesson and reminder here is technical analysis is very, very valuable. I waited for a confirmed 3 month base in the share price in the low $4's which occurred over winter 2019 and early spring and by the time there was a clear break out from that baseline share price support anecdotal evidence was beginning to mount that the Auckland market was also breaking out of its fairly lengthy price malaise.

TA was then firing off some compelling BUY signals and added to the very strong fundamental analysis such that a compelling investment case clearly existed. My nose for a feed then started screaming at me to buy even though in my head I didn't really want to go there. I simply couldn't ignore the way loud TA signals lined up with compelling value any longer and had to start buying in October. This is a very good example that great money can be made after (and not before), strong technical analysis signals confirm deep value fundamental analysis. When strong TA and FA line up that's when one should really sit up and take serious notice.

If we look at TA now for the rest of the sector its perhaps worth noting that ARV, RYM and SUM are at or about fresh all time high's with nothing but blue sky's ahead of them. OCA on the other hand is struggling to clearly make a break out from its historical high some time back of $1.23. I don't see a compelling FA case for RYM at the current level, (forward PE of 32) so in my opinion money released from this takeover is probably best directed to SUM or ARV. (trader Jackson will probably be pleased to see me say that).

Anyway...bring on tomorrow and hopefully $7.25 or maybe, really make my day and make it a little bit more :t_up:

[winner69]

No need to bother with TA or consensus targets or any of that stuff - the BIGGEST BUY SIGNAL for MET was when the price drifted to about 33% of RYM’s share price ...in August around the $4.20 / $4.30 mark

[Beagle]

I'll always be sticking with analyzing things properly than relying on spurious price relativity theories.

[couta1]

I'll always be sticking with analyzing things properly than relying on spurious price relativity theories. Analysis is crap mate, stick with long proven "Gold standard" relativity facts.

[winner69]

Analysis is crap mate, stick with long proven "Gold standard" relativity facts.

So true mate - relativity theories been around much longer than PE ratios and TA

Most ‘Analysis’ of stocks is just a way of convincing the ‘analyst’ he’s right ...a confidence thing

Relativity is a law of nature ....eliminates the emotion.

[Beagle]

Analysis is crap mate, stick with long proven "Gold standard" relativity facts.

Old wives tales about price relativity are for people who can't undertake proper analysis :p

[pierre]

Old wives tales about price relativity are for people who can't undertake proper analysis :p

I think your leg is being pulled Beagle - ever so gently though.

[Beagle]

I think your leg is being pulled Beagle - ever so gently though.

Its all good, we're all mates. They're just envious I was the lead dog on this hunt so are barking in protest :D

[winner69]

Its all good, we're all mates. They're just envious I was the lead dog on this hunt so are barking in protest :D..

‘leader of the pack’

New Years Honours out next week as well.:cool:

[Beagle]

Everyone will be happy tomorrow. Huge feed for the whole pack no matter when they joined in the hunt :t_up:

[winner69]

Be an anti-climax tomorrow if the trading halt is extended to next week ...or later

[Beagle]

Yes, hopefully not.

[Beagle]

https://www.nzx.com/announcements/346583 - Time to go to the beach I think.

My thoughts in terms of $7.00 include a reference point that the share price was just $4.37 less than 3 months ago on 3 October 2019.

Major shareholders and the interested party will know a lot more about the current state of affairs of the company, in particular how sales have gone since they last reported for the year ended 30 June 2019, (nearly 6 months of additional sales information major stakeholders will be aware of under due diligence that small shareholders are presently in the dark about), and the current status of weathertightness issues so I will reserve judgement on whether I will accept $7.00 until I have a proper update from MET and read the appraisal reports thoroughly.

Its worth remembering that there are two other interested parties and that $7.00 is probably slightly below the net tangible assets of the company as at 31 December 2019. I don't think there is any hurry to sell when the trading halt is lifted on Monday.

[winner69]

Sold out much too cheap (even if $4.39 is Beagles reference point)

MEt Board shown their usual slackness .... but NZ Super who have probably driven this process will be happy to get $7.00 so that’s the end of the matter

We ‘small’ shareholders don’t get much say if any in the matter anyway.

[Balance]

Top 3 'active' shareholders being NZ Super, ACC and ISG Ltd own 32% so it is inconceivable that the Board & bidder do not interact with them.

Means that they are bound by confidentiality and cannot trade any shares until such time as the deal is confirmed on or off.

Add on ANZ Bank various investment funds' 11.8% and the top 4 shareholders will deliver control if they like the price offered by the bidder.

Top 4 shareholders own 43.8% .

Agreed it's a done deal at $7, W69.

Guess they are happy with the price being a little bit above NAV ($6.96).

[Beagle]

$6.96 NAV was as at 30 June 2019 so does not include the increase in value of the assets since then or the companies earnings.
Maybe there's a special dividend as part of this deal as well which at least pays out earnings for the last 6 months ?
Maybe that dividend is based on IFRS earnings which includes property gains in the last 6 months ?

[NOCASH]

Gents - what is next? the proceeds from MET, should I put it into OCA or SUM? or is OCA and SUM overpriced?

[couta1]

Gents - what is next? the proceeds from MET, should I put it into OCA or SUM? or is OCA and SUM overpriced? Forget those, go with the milk.

[NOCASH]

Milk? ATM, A2 milk? Synlait?

[couta1]

Milk? ATM, A2 milk? Synlait? Forget Synlait, yep ATM/A2M.

[winner69]

Gents - what is next? the proceeds from MET, should I put it into OCA or SUM? or is OCA and SUM overpriced?

If a great company in the retirement sector with a tremendous development pipeline and property prices booming can only sell for net asset value than both OCA and SUM are hugely overpriced

nOCASH - as Couts says milk is the way to go

[Scrunch]

$6.96 NAV was as at 30 June 2019 so does not include the increase in value of the assets since then or the companies earnings.
Maybe there's a special dividend as part of this deal as well which at least pays out earnings for the last 6 months ?
Maybe that dividend is based on IFRS earnings which includes property gains in the last 6 months ?

To be done at $7 the valuation appraisal report will need to have the bottom end of the valuation range below $7 so the bid falls into the assessed range. It will be interesting to see this done when all the other listed comparator in NZ are somewhat over NTA.

[Beagle]

Gents - what is next? the proceeds from MET, should I put it into OCA or SUM? or is OCA and SUM overpriced?

See post #8528 in the SUM thread and remember who was the lead dog on this MET hunt.

[winner69]

To be done at $7 the valuation appraisal report will need to have the bottom end of the valuation range below $7 so the bid falls into the assessed range. It will be interesting to see this done when all the other listed comparator in NZ are somewhat over NTA.

So three ‘interested’ parties and one was ‘credible’ and all the Board can extract is close to NAV doesn’t set a very high benchmark for the sector as a whole does it Scrunch

Top end of town with zillions of cash say 0.9 times to 1.1 times NTA is what these companies are worth.

[limmy]

Have I missed out something here ?
Today's announcement says that "the third party has completed due diligence". Has MET conducted its own valuation report ? Should the shareholders get to see an actual independent appraisal report first ?

Also, why are they not disclosing who these 2nd and 3rd parties are ?

[Baa_Baa]

So three ‘interested’ parties and one was ‘credible’ and all the Board can extract is close to NAV doesn’t set a very high benchmark for the sector as a whole does it Scrunch

Top end of town with zillions of cash say 0.9 times to 1.1 times NTA is what these companies are worth.

Not really, they're 'saying' that's what MET is worth, not the sector. Must be something about MET that only warrants an acceptable bid at around NTA, can't conflate that to the whole sector.

Still a get out of jail card for long suffering shareholders. I'd be doing the jig instead of quibbling about 25 cents here or there. Nice windfall for those with the nose. Well done.

[Yoda]

Milk? ATM, A2 milk? Synlait?
It is all fun and games on here. Everybody thinks they’re right and that’s what Makes this site so interesting. Couta1 loves his milk And beagle loves the old folks. Unfortunately no one has a crystal ball. You could do some diversification and get a bit of both or do something else completely Like SKO. Beagle does give some very good analysis, so trying to understand it and I look up what I don’t understand. It’s a bit difficult to understand what is tongue in cheek, between what is researched, I take it with a pinch of salt and do lots of lots of research Make notes, so you remember what you decided what you did, and then go for it . When the MAs are one above the other, then that might be a nice indicator. :t_up:
Beagle ,Winner 69, Balance, Couta1 and all the rest of you, Thank you for another entertaining and educational year and for all your help and support and sharing your wisdom and humour, let’s hope we all have a good 2020 vision for next year

[winner69]

Have I missed out something here ?
Today's announcement says that "the third party has completed due diligence". Has MET conducted its own valuation report ? Should the shareholders get to see an actual independent appraisal report first ?

MET would have down their own valuation

They’ll produce a Scheme of Arrangement or something similar. It’ll probably have the Directors support and recommendation to accept

There will be an ‘independent report’ which will probably say fair value between $6.50 and $7,20 so $7.00 is pretty good.

Probably a done deal. You and me don’t matter or really count and we’ll have to take what our Directors say is good.

Independent only academic and only a good read for a laugh - if you get my gist.

That’s how I see it anyway

[limmy]

Thanks Winner69 for the explanation.
I suppose all will be revealed on Monday by noon, including who the 2nd and 3rd parties are.

[trader_jackson]

Looks like a done deal now... I thought there was gonna be a $7.50 offer, maybe $8 even (like management were touting) instead selling for virtually NTA in the end, oh well, better than below NTA.

[Raz]

Looks like a done deal now... I thought there was gonna be a $7.50 offer, maybe $8 even 8? instead selling for virtually NTA.


I agree, rather disappointing. Still a done deal with flow money into other shares in the sector.

[Snow Leopard]

Looks like a done deal now... I thought there was gonna be a $7.50 offer, maybe $8 even (like management were touting) instead selling for virtually NTA in the end, oh well, better than below NTA.

Listen carefully, for between the random barks of the dog is the quiet wisdom of the cat.

[Beagle]

It is all fun and games on here. Everybody thinks they’re right and that’s what Makes this site so interesting. Couta1 loves his milk And beagle loves the old folks. Unfortunately no one has a crystal ball. You could do some diversification and get a bit of both or do something else completely Like SKO. Beagle does give some very good analysis, so trying to understand it and I look up what I don’t understand. It’s a bit difficult to understand what is tongue in cheek, between what is researched, I take it with a pinch of salt and do lots of lots of research Make notes, so you remember what you decided what you did, and then go for it . When the MAs are one above the other, then that might be a nice indicator. :t_up:
Beagle ,Winner 69, Balance, Couta1 and all the rest of you, Thank you for another entertaining and educational year and for all your help and support and sharing your wisdom and humour, let’s hope we all have a good 2020 vision for next year

Thanks Yoda. People have to live somewhere, they don't have to drink A2 Milk. 37% compound average growth rate for the last 5 years is quite SUM achievement and only trading on a forward PE for 2020 of about 15-16. No other stock on the NZX is trading on proven metrics that compelling and a PEG of just 0.4

I think there's going to be a decent dividend for then half year earnings to 31 December 2019 on top of the $7...at least that is my expectation that the board would have thought of who is entitled to earnings for the last 6 months, i.e. current shareholders. Hopefully this dividend will be based on IFRS profits, (i.e. all inclusive profit inclusive of property value gains since 30 June 2019). Provided that's the case I am inclined to accept and move on.

A lot of money will stay in this retirement sector which is why the rest of it is on fire.

[couta1]

Thanks Yoda. People have to live somewhere, they don't have to drink A2 Milk. 37% compound average growth rate for the last 5 years is quite SUM achievement and only trading on a forward PE for 2020 of about 15-16. No other stock on the NZX is trading on proven metrics that compelling and a PEG of just 0.4

I think there's going to be a decent dividend for then half year earnings to 31 December 2019 on top of the $7...at least that is my expectation that the board would have thought of who is entitled to earnings for the last 6 months, i.e. current shareholders. Hopefully this dividend will be based on IFRS profits, (i.e. all inclusive profit inclusive of property value gains since 30 June 2019). Provided that's the case I am inclined to accept and move on.

A lot of money will stay in this retirement sector which is why the rest of it is on fire. Lol Beagle you are becoming Sumwhat incorrigible, time for you to pour yourself a large glass of A2 and Canterbury cream.

[winner69]

Wonder if what we see next week will be ‘this is it’ unless we get a superior offer

The MET Directors must be feeling a bit sheepish and somewhat embarrassed accepting book value for a retirement company with has had huge growth and has a superb development pipeline at a time property prices are starting to boom again (that no doubt is why they mentioned 8 bucks plus)

[Joshuatree]

Often management are given a sweetheart deal, financial rewards to accept such offers , if so no embarrassment and every justification they can come up with.

[Beagle]

Agreed, the reports on this deal are going to make for a very interesting read and I am a bit underwhelmed at $7, would have been more satisfied at $7.25.
$7 is ostensibly NTA as at 30 June 2019...so if existing shareholders don't get the full profits since then including gains in the property value (IFRS profits for the last 6 months) by way of a special dividend I will want a very fulsome explanation as to why this offer should be considered to be fair and reasonable.

Worth noting that every other listed retirement company is now trading at a minimum premium to NTA of 30%.

[carrom74]

https://www.reuters.com/article/us-metlifecare-ltd-m-a/new-zealands-metlifecare-agrees-to-994-million-buyout-says-market-regulator-idUSKBN1YU18Z

Interesting paragraph in the report which reads as (does it mean there is a lot more work to be done or MET hasn't agreed to the offer...?? or may be the other two offers are also being looked at --albeit with SIA)
In NZXR’s Friday announcement, it did not specify whether the buyer offering NZ$7 per share was the one Metlifecare had been negotiating with.

[macduffy]

Often management are given a sweetheart deal, financial rewards to accept such offers , if so no embarrassment and every justification they can come up with.

I doubt that we'll ever be told, but it would be interesting to know what, if any, "golden parachutes" blossom on a change of ownership or control.

[winner69]

I doubt that we'll ever be told, but it would be interesting to know what, if any, "golden parachutes" blossom on a change of ownership or control.

Glen Sowry needs to do OK ...might find it hard getting another job like he has with MET

[Beagle]

I think we are in for an interesting time ahead with this one. Looking at where the rest of the sector was priced, (even before the first noises of a takeover of MET), nobody can make the case that $7 is a compelling price given the better prospects for Auckland real estate and the companies own enhanced development pipeline. Really, it is the absolute minimum possible price anyone could recommend, with a straight face.

Lets not forget that there are three interested parties and there could well be a competitive bidding situation.

I think Glen Sowry could have done a lot better to appraise the market of the prospects for 2020 to keep the market better informed and I for one will be looking for a very clear report on the current state of the business before making any decision to sell my shares.

[peat]

An axiom stated earlier on these forums is 'the first bid is never the last' , even though this $7 bid is not the first , it kind of is because 6.50 was the lowball offer never even considered.

[winner69]

I think we are in for an interesting time ahead with this one. Looking at where the rest of the sector was priced, (even before the first noises of a takeover of MET), nobody can make the case that $7 is a compelling price given the better prospects for Auckland real estate and the companies own enhanced development pipeline. Really, it is the absolute minimum possible price anyone could recommend, with a straight face.

Lets not forget that there are three interested parties and there could well be a competitive bidding situation.

I think Glen Sowry could have done a lot better to appraise the market of the prospects for 2020 to keep the market better informed and I for one will be looking for a very clear report on the current state of the business before making any decision to sell my shares.

Agree - slack Board and management. Board in particular just resting on their ‘laurels’

No wonder NZ Super Fund get pissed off and forced all this

And beagle me old mate ..it will be decided for us to sell our shares (if still holding) ..our say won’t count for much except as a token protest.

[Beagle]

Agree - slack Board and management. Board in particular just resting on their ‘laurels’

No wonder NZ Super Fund get pissed off and forced all this

And beagle me old mate ..it will be decided for us to sell our shares (if still holding) ..our say won’t count for much except as a token protest.

Unless I am out of date with the takeovers regulations, (which is quite possible), lets not forget buddy that they can't force a takeover unless they get to 90% and acquire the rest through compulsory acquisition.
When was the last time there was a takeover with acknowledgement from the board that there are three interested parties ? Doesn't the board have an obligation to try and get the best price from those three ? Maybe major shareholders have signed a deal to sell at $7 that includes the usual caveat of unless there's a superior offer forthcoming as is quite commonly the case ?

I'm not so sure as you and others this is a completely done deal at $7. Another higher bid wouldn't surprise me at all.

Consider this too. How well has staying on the register as a minority shareholder worked out for RBD shareholders !
With the rest of the sector priced where it is and with an already very fulsome load of SUM shares in my portfolio I certainly think staying on as a minority shareholder is on the cards for me. Incoming board and management are highly likely to be a LOT more motivated than the current lot !

MET occupy a very interesting space in the Auckland market with a lot of their smaller units under half the average price of an Auckland home. I'm in no hurry to sell.

[winner69]

Lets not forget buddy that they can't force a takeover unless they get to 90% and acquire the rest through compulsory acquisition.
When was the last time there was a takeover with acknowledgement from the board that there are three interested parties ?
I'm not so sure as you and others this is a completely done deal at $7.

Consider this too. How well has staying on the register as a minority shareholder worked out for RBD shareholders !
With the rest of the sector priced where it is and with an already very fulsome load of SUM shares in my portfolio I certainly think staying on as a minority shareholder is on the cards for me. Incoming board and management are highly likely to be a LOT more motivated than the current lot !

MET occupy a very interesting space in the Auckland market with a lot of their smaller units under half the average price of an Auckland home.

Agree announcements have been rather obtuse so anything could happen

But in saying that if things are still up in the air and nowhere being finalised then the announcements so far have bordered on the irresponsible.

It reads as a Scheme of Arrangement with a yes vote recommended by the Directors .....hopefully with the rider ‘unless a better offer is forthcoming’ ....that way only requires 75% voting YES at the shareholders meeting.

[Beagle]

Irresponsible ?...maybe. Perhaps they should just lock this whole thing down in an extended trading halt until all 3 interested parties have had time to do thorough due diligence and the most interested has presented their best offer. If that's a few weeks then so be it. Who cares, its the holiday's anyway.

My hope is that on Monday they extend the trading halt again to give all parties extra time with the hope shareholders get a better result. $7.00 is pretty miserable for a company that has grown underlying earnings at an average of 15% per annum for the last 5 years, (average across the property cycle). Probably only a FY20 PE of 14 times earnings. Heck, a couple of years ago it was $6.50 and the whole sector has moved (in percentage terms), a lot further north than 8% in that time !!

[limmy]

Irresponsible ?...maybe. Perhaps they should just lock this whole thing down in an extended trading halt until all 3 interested parties have had time to do thorough due diligence and the most interested has presented their best offer. If that's a few weeks then so be it. Who cares, its the holiday's anyway.

My hope is that on Monday they extend the trading halt again to give all parties extra time with the hope shareholders get a better result. $7.00 is pretty miserable for a company that has grown underlying earnings at an average of 15% per annum for the last 5 years, (average across the property cycle). Probably only a FY20 PE of 14 times earnings. Heck, a couple of years ago it was $6.50 and the whole sector has moved (in percentage terms), a lot further north than 8% in that time !!
I agree, the $7 bid which is essentially paying for the NTA only, doesn't recognise the full value of the company, its Brand its Goodwill and its recent years' good performance. They might have a pleasant surprise announcement on Monday at noon time ?

[Beagle]

I agree, the $7 bid which is essentially paying for the NTA only, doesn't recognise the full value of the company, its Brand its Goodwill and its recent years' good performance. They might have a pleasant surprise announcement on Monday at noon time ?

Tomorrow will be interesting alright.

I think there's a pretty good chance one of the other two interested parties will be prepared to pay more than $7 because the 5 year compound average growth rate (CAGR) of 15% per annum includes 3 tough years for the Auckland property market. (This is better than RYM's CAGR over the last 5 years)

One party will most likely put a stake in the ground at $7 tomorrow but I would not be surprised if another party is prepared to trump that in due course.

Hopefully one of the other interested parties is prepared to pay at least some modest premium to NTA because of MET's commendable track record of growth. I would like to think that shareholders would at least get something for the intangible assets / goodwill, time will tell.

I don't see any reason to rush to sell when the trading halt is lifted, that's for sure !

[Bjauck]

Tomorrow will be interesting alright.

I think there's a pretty good chance one of the other two interested parties will be prepared to pay more than $7 because the 5 year compound average growth rate (CAGR) of 15% per annum includes 3 tough years for the Auckland property market. (This is better than RYM's CAGR over the last 5 years)..
Cagr/5yrs= 15%pa

From Sharesight, I see the MET annual return (SP increase+dividend) is about 8% pa over the past 5 years. (RYM’s is 16% pa)

Infratil’s exit and The leaky buildings issue has been overly dampening market Expectations? Three potential suitors see a good deal in their sights?

[Beagle]

Agreed. I am trying to remember the last time a company was in play and there were three suitors ? Another case doesn't spring readily to mind.
$7 looks too cheap to me...I think there's at least a 50% chance of a more competitive bid in the near future.

[King1212]

Article on NBR said MET has accepted conditional $7 a share....

[Snow Leopard]

We will see what tomorrow (or the day after, or the next trading day after that, or etc) brings, but a offer at $7 is pretty good.
People can huff & puff all they want but this is a company with issues.

Having said that, like every other full or partial takeover of an NZX company I am opposed to it.

[CatO'Tonic]

No surprises here...
https://www.nzx.com/announcements/346608
(https://www.nzx.com/announcements/346608)

[winner69]

Kim Ellis said “The Board is pleased to have achieved this outcome on behalf of shareholders.”

Slack as Board

[winner69]

No surprises here...
https://www.nzx.com/announcements/346608
(https://www.nzx.com/announcements/346608)

No doubt we’re all hoping for a ‘superior offer’

Two other interested parties they keep saying

[Bjauck]

No doubt we’re all hoping for a ‘superior offer’

Two other interested parties they keep saying At that price, I won't be rushing to sell my long term holding.

Another NZ listed company to pass into foreign ownership? As a significant chunk of residential land would become foreign owned, would it need to meet overseas investment rules?

DYOR

[winner69]

NZ Super Fund signed over their nearly 20% to EQT

Happy to rid themselves of this dog investment I reckon

[Bjauck]

NZ Super Fund signed over their nearly 20% to EQT

Happy to rid themselves of this dog investment I reckon Why would EQT buy it if it were such a "dog" of an investment?

[Brain]

Maybe a better solution would be to replace the board with directors that are competent. Too simple really.

[Balance]

Why would EQT buy it if it were such a "dog" of an investment?

Same reason why NAB bought BNZ or Hart bought Goodman Fielder - turn a dog into a bloodhound.

[dobby41]

Why would EQT buy it if it were such a "dog" of an investment?

Because they think they can do better and extract the real value?

[Bjauck]

Sweden's EQT raised 9 billion euro back in March. Pension funds were keen on giving it money. So it has a big war chest to use when snapping up good infrastructure investments around the World.

NZ's tiny and weak KiwiSaver and small (as a % of our GDP) private pension funds just cannot keep up. With present policies, The NZ sharemarket capitalisation is destined to remain at a small percent of our economy

Sweden’s EQT raises €9bn for its biggest infrastructure fund
https://www.ft.com/content/b96a774c-44c0-11e9-b168-96a37d002cd3

[Bjauck]

Same reason why NAB bought BNZ or Hart bought Goodman Fielder - turn a dog into a bloodhound. Or maybe they think the pedigree is being valued as mongrel on the NZX?

[Balance]

Or maybe they think the pedigree is being valued as mongrel on the NZX?

Might be the case but I believe we should not automatically assume that an acquirer always know what it is doing.

There are disasters too out there where the acquirer paid too much.

[winner69]

Why would EQT buy it if it were such a "dog" of an investment?

‘Dog’ of an investment insofar as they are concerned. Infratil got out in 2017 when the share price was about $6 - NZ Superfund stayed in.

[couta1]

Now to decide whether to take the money and run if it trades near $7 or leave my money tied up for another 5-6 months when it could be milking it elsewhere.

[trader_jackson]

Looks like a done deal now... I thought there was gonna be a $7.50 offer, maybe $8 even (like management were touting) instead selling for virtually NTA in the end, oh well, better than below NTA.

despite the noise on this thread by sum, it really is a done deal now. Not really a mention of all the other interested parties and competitive bidding etc - they arent interested in a dog - and I suppose the board know they are lucky enough just to get to the $7 mark - despite this likely being no premium to NTA.

Ah well, a get out of jail card for holders will still be greatly appreciated (and already is with the SSH notices announced this morning)

[Beagle]

Hmmmmm...a case of lets see what happens. $7 is the absolute minimum. SSH voting agreement by the N.Z. Super fund states a minimum of $7 and leaves open the possibility for a competing offer as does the scheme information agreement. This will be interesting. Another competing offer to come out of the woodwork in the near future ? Time will tell.

Yes they need OIO approval.

[Joshuatree]

At that price, I won't be rushing to sell my long term holding.

Another NZ listed company to pass into foreign ownership? As a significant chunk of residential land would become foreign owned, would it need to meet overseas investment rules?

DYOR

Yes NZ turning into a "Claytons" you know the NZ that isn't NZ but majority owned by non NZ'rs.
OIC a bit of a wuss but be great if they "stood up" to this hollowing out.

Also this has been a swift transaction atp, why?

[Balance]

Yes NZ turning into a "Claytons" you know the NZ that isn't NZ but majority owned by non NZ'rs.
OIC a bit of a wuss but be great if they "stood up" to this hollowing out.

Also this has been a swift transaction atp, why?

Ok for NZ companies to buy overseas but not okay for overseas companies to buy into NZ?

[Beagle]

Ok for NZ companies to buy overseas but not okay for overseas companies to buy into NZ?

No issues if they pay a fair price. NTA only for a company that's had a CAGR of 15% per annum average for the last 5 years is inadequate and the NZX is in real trouble if we're going to allow companies to be taken over as cheaply as this.

I hope SUM other company comes up with a better offer.

[dobby41]

No issues if they pay a fair price. NTA only for a company that's had a CAGR of 15% per annum average for the last 5 years is inadequate and the NZX is in real trouble if we're going to allow companies to be taken over as cheaply as this.

I hope SUM other company comes up with a better offer.

It's the shareholder that allow it.
If you believe that MET is worth more than NTA then I'd expect you not to sell until forced by compulsory acquisition when they get to 90%.

[Balance]

No issues if they pay a fair price. NTA only for a company that's had a CAGR of 15% per annum average for the last 5 years is inadequate and the NZX is in real trouble if we're going to allow companies to be taken over as cheaply as this.

I hope SUM other company comes up with a better offer.

Willing buyer, willing seller so let's see how the vote goes.

As for the NZX, best not to consider it as other than a plucked goose with no golden eggs left to lay after Weldon and gang buggered the goose to feather their own nests!

[Beagle]

It's the shareholder that allow it.
If you believe that MET is worth more than NTA then I'd expect you not to sell until forced by compulsory acquisition when they get to 90%.

You'd be right. I am strongly inclined to hold out for a better offer.

[Beagle]

Willing buyer, willing seller so let's see how the vote goes.

As for the NZX, best not to consider it as other than a plucked goose with no golden eggs left to lay after Weldon and gang buggered the goose to feather their own nests!

SUM companies on the NZX will do very well in the future provided they're also not taken over :eek2:

[peat]

that meeting is 'kin ages away.
hoping to hunt out superior offers.
6.80 not tempting for those who want 7.25
TVM though

[Beagle]

Time value of money not as important as it once was, (with interest rates where they are).

[Balance]

that meeting is 'kin ages away.
hoping to hunt out superior offers.
6.80 not tempting for those who want 7.25
TVM though

There are a few steps to go through yet:

1. Independent report (which will inevitably show a valuation range which includes $7 as almost mid-point).

2. EGM to approve the deal.

3. Regulatory approvals.

4. Possibility of another bid or 10% holding out for a higher valuation from an independent valuation.

Meanwhile, funds have plenty of $$$$ and will be happy to pick up the 20c to 25c (2.9% to 3.7%) return for holding the stock for 3 to 5 months. Better than the bank.

[couta1]

Time value of money not as important as it once was, (with interest rates where they are). Interest rates not relevant when your buying milk, so yes important.

[Beagle]

Interest rates not relevant when your buying milk, so yes important.

You'll be out ASAP...I am almost certain of that.

[peat]

Time value of money not as important as it once was, (with interest rates where they are).

I was meaning more opportunity cost with the market so hot , but also I was thinking its an opportunity to reduce exposure to the sector - some of us must have a very large percentage tied up in retirement stocks.

There isn't much liquidity at these higher levels either so maybe the decision is more easily made

What about buying more? Turning 6.80 into 7.00 hmm not really worth it … but still a good annual return.

[macduffy]

It's the shareholder that allow it.
If you believe that MET is worth more than NTA then I'd expect you not to sell until forced by compulsory acquisition when they get to 90%.

Takeover by Scheme of Arrangement is proposed, requiring a 75% vote in favour?

[Beagle]

There's also the chance of a higher offer being forthcoming to factor into the equation...

I think Winner is right that the board have a lot to answer for. Shares would never have been at $5.08 before this started if the board clearly articulated their strategy, had forecast FY20 profit and clearly articulated how sales were going.

Sure there's some remediation issues for weathertightness, as there will be for all the listed companies in this sector.

It will be a real shame to see MET get taken over in May 2020 just for the net asset value as at 30 June 2019, nearly a year earlier !
Why should shareholders give away 11 months profit and gains on assets for nothing ?
Lets not forget that MET has four year accreditation on the vast majority of their care facilities.
Why are we giving away (to a foreign entity), the intellectual property for nothing ?
How is this in the best interests of shareholders ?
How on earth can the board be proud of this result for shareholders ?

I really hope a better offer is forthcoming from a NZX company.

[Scrunch]

Takeover by Scheme of Arrangement is proposed, requiring a 75% vote in favour?

That was my understanding also. By going this direction they only need to get 75% and portfolio institutional shareholders will make up most, if not all the shareholdings needed to get to 75% given the current shareholders on MET's share register. The possible down-side for the purchaser is the process is slower.

[beetills]

What track record have EQT got as far as holding on to purchases or are they a company that strips and sells.

[BlackPeter]

What track record have EQT got as far as holding on to purchases or are they a company that strips and sells.

https://www.eqtgroup.com/

https://www.eqtgroup.com/About-EQT/Fast-facts/


During EQT Funds' ownership,historically companies have:

An average annual sales growth of 12%
An average annual earnings growth (EBITDA) by 11%
Its number of employees increased by 10%

... obviously - these are data from their website, but it appears they are interested in improving the companies they own ...

[Bjauck]

Ok for NZ companies to buy overseas but not okay for overseas companies to buy into NZ? NZ's hollowed out stock exchange indicates a fairly lopsided situation? Bearing in mind that Sweden's population is about twice that of NZ's, I wonder what the comparative investment by NZ concerns in Sweden, or other EU countries, is?


Might be the case but I believe we should not automatically assume that an acquirer always know what it is doing.

There are disasters too out there where the acquirer paid too much.
"EQT’s infrastructure funds have delivered realised gross internal rate of returns — a closely watched measure of performance — of 34 per cent."
https://www.ft.com/content/b96a774c-44c0-11e9-b168-96a37d002cd3

[Balance]

NZ's hollowed out stock exchange indicates a fairly lopsided situation?


"EQT’s infrastructure funds have delivered realised gross internal rate of returns — a closely watched measure of performance — of 34 per cent."
https://www.ft.com/content/b96a774c-44c0-11e9-b168-96a37d002cd3

Not really.

More a function of NZ companies making a hash of their acquisitions when they invest overseas.

Think of Fonterra investing billions and losing billions overseas, think Telecom, Fletcher, Air NZ, CBL, Brierley, Fisher & Paykel etc etc investing billions and losing billions overseas etc etc etc.

Cannot blame that on the overseas companies buying NZ assets.

[King1212]

Do we still get the dividend if we hold till April 2020...as result will be in Feb 2020

[Beagle]

Do we still get the dividend if we hold till April 2020...as result will be in Feb 2020

I would have thought so. I haven't had time to read the full scheme implementation agreement yet but its here if anyone wants to drill down into it immediatly.
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314714.pdf

I had a really quick skim read this morning and can't be bothered drilling down further at this stage, (its the holiday's !).
I am hoping a better offer is forthcoming in January 2020.

[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

[winner69]

Do we still get the dividend if we hold till April 2020...as result will be in Feb 2020

Just for you king


Consideration means NZ$7.00 in cash in respect of each MET Share held by a Scheme Shareholder as at 5.00 pm on the Scheme Record Date, as reduced by the per MET Share value of any other dividend, the record date for which falls between the date of the Scheme Implementation Agreement and the Implementation Date;

[Beagle]

My approach to this is to give it the full "BBB" treatment (Beagle barking belligerently) in the hope of knocking some sense into the board and other shareholders.

Worth noting that board approval of the deal is conditional on it being within the range of the "independent" valuation appraisal report. Who is truly independent here though ?
Jarden and many others companies will be earnings heaps from this and be incentivised to get the deal done, as will senior management and the board.

No other company listed on the NZX in the retirement sector is currently trading at less than a 37% premium to NTA....Hmmmmmmm.

[Beagle]

Just for you king


Consideration means NZ$7.00 in cash in respect of each MET Share held by a Scheme Shareholder as at 5.00 pm on the Scheme Record Date, as reduced by the per MET Share value of any other dividend, the record date for which falls between the date of the Scheme Implementation Agreement and the Implementation Date;

So... Not only do they get all earnings for the 11 months of the FY20 year for nothing but the capital gain on all properties for 11 months for nothing too.
Absolutely disgraceful. How on earth can the board think they have done a good job here ?

Effectively its being sold at something of a discount to NTA if this current scheme gets implemented in May 2020. That's breathtakingly bad considering what the rest of the sector is doing.

A heads-up, the barking at the shareholder approval meeting is going to be very fierce !

[Bjauck]

...

No other company listed on the NZX in the retirement sector is currently trading at less than a 37% premium to NTA....Hmmmmmmm. It should be a nice addition to their portfolio earning EQT an internal rate of return of 34%.

[peat]

apparently, Metlifecare’s boardisn’t allowed to shop around for a better offer, but can contemplate a superiorbid if one emerges


EQT have a bout 42 percent already

[Beagle]

apparently, Metlifecare’s boardisn’t allowed to shop around for a better offer, but can contemplate a superiorbid if one emerges


EQT have a bout 42 percent already


From what I can see its only the NZ superfund with just under 20% that has formally signed off on a voting deed at a minimum of $7 in the absence of a better offer http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346613/314718.pdf.
Another 22% of shareholders have indicated they will support the agreement (but appear to have not signed off on a voting deed), again, conditional on the absence of a superior offer.
You're correct with your first point, which I noted from my skim read of the SIA this morning and lets not forget that there are two other interested parties.

I would be VERY disappointed if a quality company like this with an excellent track record of earnings growth was taken over by a foreign fund for less than current Net Tangible Asset backing.

[Beagle]

It should be a nice addition to their portfolio earning EQT an internal rate of return of 34%.

If they nick this for $7 there's no question they have got themselves a genuine bargain with superb earnings growth potential.

Why have the board rolled over like a pet Labrador and played so nice and effectively asked for a tummy rub ?

[Bjauck]

I see MET is trading at $6.80. "The market" is not expecting a better offer?

[Beagle]

7.00 / 6.80 for five months gives a 7.2% annualized return which is not remarkable given that there are a few hurdles to be jumped through for this deal to proceed.

I think the market at this price is saying that a superior offer is quite possible.

[BlackPeter]

I see MET is trading at $6.80. "The market" is not expecting a better offer?

Its four months or so to go. Lots of things can happen.

[couta1]

My gut feeling says this thing is a done deal at $7 and will go through at that in due course without obstruction.

[BlackPeter]

My gut feeling says this thing is a done deal at $7 and will go through at that in due course without obstruction.

Well, yes - I wouldn't expect enough shareholders to reject the bid. However ... there might be a better offer. Who knows?

[Oliver Mander]

7.00 / 6.80 for five months gives a 7.2% annualized return which is not remarkable given that there are a few hurdles to be jumped through for this deal to proceed.

I think the market at this price is saying that a superior offer is quite possible.

I admit that I was one of the sellers at $6.80. Actually think Beagle might be right - but mine was only ever a short-term trading position, and I can recycle the cash elsewhere. If it was in my investment portfolio, I would continue to hold - 7.2% annualised is still 'ok' to wait for 4 months, and thats a minimum return (6.80 v 7.00). Its quite likely that more offers will be flushed out by this.

Happy New year all!

[Beagle]

And to you mate. I have plenty of the folding stuff so no need to sell and happy to wait and see if a better offer is forthcoming.

Interestingly, volume today is already about 3 x the normal average.

[Bjauck]

I admit that I was one of the sellers at $6.80. Actually think Beagle might be right - but mine was only ever a short-term trading position, and I can recycle the cash elsewhere. If it was in my investment portfolio, I would continue to hold - 7.2% annualised is still 'ok' to wait for 4 months, and thats a minimum return (6.80 v 7.00). Its quite likely that more offers will be flushed out by this.

Happy New year all! Happy St Sylvester’s day to you! I will probably continue to be an investor until flushed out by a compulsory takeover. Certainly at the current market price it makes sense.

[NOCASH]

I am missing something here? the price is at $6.80 but bidder is willing to buy share at $7.00. Is the catch buy at $6.80 now and hold for 4 months for the take over at $7.00 to be executed?

I know there is couple of hurdles to jump over. The reason why the share price is at $6.80 at the moment is because buyers and sellers don't have faith it will go through at $7.00 in 4-5 months from now?

[winner69]

My gut feeling says this thing is a done deal at $7 and will go through at that in due course without obstruction.

Agree Couts

One thing this has proved is that RATIOS mean diddly squat eh Couts

Company touted around the world and the combined wisdom of the market says MET is only worth net asset value ....when others overs in the sector have better RATIOS

[King1212]

No...some people don't want to hold 4 months for extra 20c.....some see other shares have more opportunities in 4 months...with all due diligence n fees for pro advises....the deal will go ahead...

[NOCASH]

Thanks - understood.

Now it's thinking time, either cash now and move the funds elsewhere or wait for 4 months and get paid out at $7.00 - now that is a done deal at $7.00

[Joshuatree]

Nearly a 3% yield for 4 months thats 9 % yield yearly equivalent, take off your brokerage.

[King1212]

It is depand on how many shares u hold...if 1000 share...the difference is $200..in 4 months...plus...don't pay broker fee plus dividend....

[NOCASH]

King, I hold 4310 shares. What would you do if you were me? Cash out now and dump it into ATM and hope for a good result in Feb 2020?

[couta1]

Bird in the hand stuff for me, half are gone so far.

[King1212]

Oww ..follow your gut feeling....that is almost $1000 from now...would ATM gains $1000 in 4 months or lost half of the value....ehmmm bring my crystal ball

[NOCASH]

Oww ..follow your gut feeling....that is almost $1000 from now...would ATM gains $1000 in 4 months or lost half of the value....ehmmm bring my crystal ball

mmmm... Good question, Had to think right now.

[couta1]

King, I hold 4310 shares. What would you do if you were me? Cash out now and dump it into ATM and hope for a good result in Feb 2020? Well you could buy around 1920 ATM at $15.20 and if it puts on $2, that's about $3800 compared to your $800ish holding MET, hang even a dollar would give you $1900.

[Balance]

Well you could buy around 1920 ATM at $15.20 and if it puts on $2, that's about $3800.

And it could go down $2 which is minus $3800 & $860 too?

[King1212]

Yup..it could loss more than $2 if result disappointed...like Comvita...THL...GTK....VGL...heap more..who know what will happen

[couta1]

And it could go down $2 which is minus $3800 & $860 too? I have milk in my eyes and therefore all my MET sales so far today are already in the milk tanker but hey each must do what they see is the best fit for them.

[King1212]

One said....don't cry over the spill milk...be careful out there.... dangerous world...

[King1212]

The company didn't comment on whether it will pay an interim dividend. The scheme offer will be reduced by any dividend paid.

If either party backs out of the deal, they face a break fee of $14.9m, or 7 cents per share.

They got 42%....the scheme will be deal at 75%holdings...

[Beagle]

Bird in the hand stuff for me, half are gone so far.

I am surprised you haven't sold the lot already lol

[Beagle]

Nearly 4 million changed hands today, about 10 times the average daily volume and interestingly nearly 2% of the total number of shares on issue.

Its going to be very interesting to see what happens here. My (usually very reliable), nose for a feed tells me to hang in there, there's a bigger feed coming.
Could easily take another glutinous feed off the table now, (which my low buy price), but I have no need for further eating after recent Christmas gluttony :lol:
Someone please strap a leash on me and take me for an extended walk :D

P.S. Nearly 4.5 million shares changed hands now, that's more than 2% of the company. Higher bid coming in January ?

Nearly 3 x by value of SUM shares have changed hands today compared to any of the other listed retirement companies, (MET excepted)
Wonder if SUM thing should be read into that or not...?

Hope the SUM board make a scrip offer of 1 SUM for 1 MET. Julian Cook and his excellent team could make a lot more of MET assets that the very average MET management team can that's for sure and then the assets would stay in N.Z. ownership too !

[macduffy]

P.S. Nearly 4.5 million shares changed hands now, that's more than 2% of the company. Higher bid coming in January ?

Perhaps. Or it could be the bidder shoring up its position. I'm with Couta on this - it could be one of those rare instances of the first offer being the last.

[winner69]

That 2% of the company sold today is in reality about 4% as a large portion of issued shares of is already spoken

Signal if a higher bid ...doubt it but if so lots of impatient mugs are going to be unhappy eh

No harm in hoping though ...hoping sometimes works

[Beagle]

That 2% of the company sold today is in reality about 4% as a large portion of issued shares of is already spoken

Signal if a higher bid ...doubt it but if so lots of impatient mugs are going to be unhappy eh

No harm in hoping though ...hoping sometimes works

SUM shares could easily be $10 as early as late January or even sooner and then a 1 SUM for 1 MET bid would look a lot better than $7 cash. MET board might have to come to their senses then.

[limmy]

Closed at $6.81 with nearly 4.6 million shares traded today. This is massive for a stock which normally does not have much turnover.

So who generally speaking are selling and who are buying ? I'm trying to understand what's going on here. Why are there so many sellers when the price is almost certanly going to be about 20c higher by April or so ? It's almost a given. ( risk free )

As for the ones who are buying, I'm guessing that these must be institutional buyers who have the cash :- Is a 20c increase within 4 months considered a good enough return for them ? Unless of course, they know something that we the mum and dad investors don't ? eg. another counter offer bid on the way ?

[Beagle]

Closed at $6.81 with nearly 4.6 million shares traded today. This is massive for a stock which normally does not have much turnover.

So who generally speaking are selling and who are buying ? I'm trying to understand what's going on here. Why are there so many sellers when the price is almost certanly going to be about 20c higher by April or so ? It's almost a given. ( risk free )

As for the ones who are buying, I'm guessing that these must be institutional buyers who have the cash :- Is a 20c increase within 4 months considered a good enough return for them ? Unless of course, they know something that we the mum and dad investors don't ? eg. another counter offer bid on the way ?

Already been pretty fully discussed today. 20 cents extra represents an annualised rate of return of approx. 7.2% per annum for the five complete months to the end of May. Scheme implementation could be early May so not possible to give an exact return as it might be just over 4 months and thus as much as 700 / 680 = 2.94% gain in 4 months = 8.82% per annum.

No scheme implementation agreement is certain so its not risk free, needs overseas investment office approval for one thing.

I believe the price is so close as the market quite correctly assesses there is a realistic chance of a higher competing bid. (We know there are two other interested parties) Obviously there will be differences of opinion on this point so some are happy to take the money and run as the annualised return given the execution risk isn't really especially compelling on its own, so there are many sellers and buyers, hence the very high volume.

As stated earlier I am fundamentally opposed to the bid on the basis that :-
1. Nothing is being paid for the intangible assets of the company.
2. Nothing is being paid for earnings from 1 June 2019 to May 2020.
3. Nothing is being paid for the increase in the value of all assets from 30 June 2019 to May 2020.

I think the acquirers offer is opportunistic and below fair value and am not selling unless legally compelled to do so under the takeover in due course. Others will take a quick buck and move on. I never bought this company to make a quick buck, I bought it as a deep value growth stock because of its compound average growth rate of 15% and I don't see the current bid as being fair and reasonable and I will be making my viewpoint known very forcefully at the forthcoming shareholders meeting to vote on this proposal.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314713.pdf

My hope is the valuation appraisal report really is independent and the expert appointed understands that MET's average underlying earnings per share growth rate over the last 5 years has actually exceeded the industry benchmark of Ryman. If that report has at the bottom of its range a figure higher than $7.00 then I would expect that the offer will need to be revised to at least the minimum of the valuation range so there is a chance a higher bid could be made to be forthcoming through this process. Whether such a report is truly independent is certainly debateable in my opinion. That or another party making a higher offer, either way $7.00 is the absolute minimum.

[winner69]

No breaking news overnight by the looks of it

Market resigned to getting the $7 it seems

Well 33% in 5 weeks (thanks to Couts Theorem) and another 15% in about 2 weeks is pretty cool,

Going to sell some ....but need to keep some as entrance fee to the Beagle Barking Show at the shareholders meeting

[Balance]

Closed at $6.81 with nearly 4.6 million shares traded today. This is massive for a stock which normally does not have much turnover.

So who generally speaking are selling and who are buying ? I'm trying to understand what's going on here. Why are there so many sellers when the price is almost certanly going to be about 20c higher by April or so ? It's almost a given. ( risk free )

As for the ones who are buying, I'm guessing that these must be institutional buyers who have the cash :- Is a 20c increase within 4 months considered a good enough return for them ? Unless of course, they know something that we the mum and dad investors don't ? eg. another counter offer bid on the way ?

Nothing unusual about high turnover after a bid is announced and accepted by directors - the same thing happened with Tegel, RBD and Trademe.

If institutional investors know something like a higher bid is in the offing, they will be paying close or above the bid price to secure as much stock as possible.

[Beagle]

Its very early days. I remain hopeful of a more reasonable competing offer in the near future.

[Balance]

Its very early days. I remain hopeful of a more reasonable competing offer in the near future.

Given my intention to hold through until I accept the $7 offer, let's hope you are right - a nice bonus for 2020!

[couta1]

No breaking news overnight by the looks of it

Market resigned to getting the $7 it seems

Well 33% in 5 weeks (thanks to Couts Theorem) and another 15% in about 2 weeks is pretty cool,

Going to sell some ....but need to keep some as entrance fee to the Beagle Barking Show at the shareholders meeting I'm nearly all out now winner, I like to put my gift horses in the stable and look to buy a gift elsewhere.

[Beagle]

I'm nearly all out now winner, I like to put my gift horses in the stable and look to buy a gift elsewhere.

Keep a ticket to the dog show, it'll be more entertaining than a Cruft's one https://www.bing.com/videos/search?q=croft+dog+show&qpvt=croft+dog+show&view=detail&mid=0945F8691CFC3C988E940945F8691CFC3C988E94&&FORM=VRDGAR&ru=%2Fvideos%2Fsearch%3Fq%3Dcroft%2Bdog%2Bshow%26q pvt%3Dcroft%2Bdog%2Bshow%26FORM%3DVDRE

[couta1]

Probably that EQT outfit stacking the buy side, mop as many up as they can to cement the deal.

[limmy]

Already been pretty fully discussed today. 20 cents extra represents an annualised rate of return of approx. 7.2% per annum for the five complete months to the end of May. Scheme implementation could be early May so not possible to give an exact return as it might be just over 4 months and thus as much as 700 / 680 = 2.94% gain in 4 months = 8.82% per annum.

No scheme implementation agreement is certain so its not risk free, needs overseas investment office approval for one thing.

I believe the price is so close as the market quite correctly assesses there is a realistic chance of a higher competing bid. (We know there are two other interested parties) Obviously there will be differences of opinion on this point so some are happy to take the money and run as the annualised return given the execution risk isn't really especially compelling on its own, so there are many sellers and buyers, hence the very high volume.

As stated earlier I am fundamentally opposed to the bid on the basis that :-
1. Nothing is being paid for the intangible assets of the company.
2. Nothing is being paid for earnings from 1 June 2019 to May 2020.
3. Nothing is being paid for the increase in the value of all assets from 30 June 2019 to May 2020.

I think the acquirers offer is opportunistic and below fair value and am not selling unless legally compelled to do so under the takeover in due course. Others will take a quick buck and move on. I never bought this company to make a quick buck, I bought it as a deep value growth stock because of its compound average growth rate of 15% and I don't see the current bid as being fair and reasonable and I will be making my viewpoint known very forcefully at the forthcoming shareholders meeting to vote on this proposal.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314713.pdf

My hope is the valuation appraisal report really is independent and the expert appointed understands that MET's average underlying earnings per share growth rate over the last 5 years has actually exceeded the industry benchmark of Ryman. If that report has at the bottom of its range a figure higher than $7.00 then I would expect that the offer will need to be revised to at least the minimum of the valuation range so there is a chance a higher bid could be made to be forthcoming through this process. Whether such a report is truly independent is certainly debateable in my opinion. That or another party making a higher offer, either way $7.00 is the absolute minimum.
Thanks Mr. Beagle. You've given me an excellent response and I think you have a thorough understanding of the whole situation. I'm with you in the hope that the valuation range will exceed the $7 on offer, and/or a better bidder shows up in the new year.

[couta1]

1.1 mill odd shares on the bid side $6.80-$6.81, as if retail punters are going to sell them that many. Lol

[Beagle]

A whopping 4.5m shares done yesterday at that level and today so far, less than 40,000. I think its fair to say that the number of shareholders prepared to sell at ~ $6.80 is drying up quite fast :)

[Bjauck]

1.1 mill odd shares on the bid side $6.80-$6.81, as if retail punters are going to sell them that many. Lol

Unfortunately, to me, it seems some big holders think this is likely to be the only serious offer although MET is still in the play.

Consents notwithstanding, EQT seems set to add a chunk of NZ’s retirement residential real estate to its portfolio with an impressive performance record. Swedish pension funds will be the beneficiary from the outlays of NZ pensioners. I think it is a pity for NZ as a whole.

And yep to a previous poster. The times NZ companies do make overseas investments, they often seem to get dogs. Whereas overseas companies do seem to snaffle cheaply so many good NZ pedigrees.

[limmy]

1.1 mill odd shares on the bid side $6.80-$6.81, as if retail punters are going to sell them that many. Lol
I'm not selling them my shares. If they can see the value at this price range, that's good enough reason for me to hold. I've always thought of MET as one of the 3 main companies in the rest home sector that I should own. In a way, I'm a bit disappointed that I'll be losing one of my long term hold companies.

[couta1]

So if EQT are buying on market currently then the more shares they buy around current price the less they have to pay $7 for, very cunning.

[Marilyn Munroe]

So if EQT are buying on market currently then the more shares they buy around current price the less they have to pay $7 for, very cunning.

Wouldn't a bidder in a scheme of arrangement have to do a standstill agreement while the scheme was being considered?

Boop boop de do
Marilyn

[Beagle]

Wouldn't a bidder in a scheme of arrangement have to do a standstill agreement while the scheme was being considered?

Boop boop de do
Marilyn

I haven't felt inclined to dissect the paperwork in great detail, (as I am genuinely hoping for a better offer so I don't have to read the odious terms of this one), but I would think there's a very high chance you'd be right. My nose for a feed tells me January could be a very interesting month for MET, (another 1% of all shares, about 2% of the free float changed hands today on top of the ~ 4% of free float yesterday. Hmmmm

[dreamcatcher]

Completely out excellent and profitable 1yr hold........:t_up:

[JohnnyTheHorse]

For clarity on Scheme of Arrangement acceptance levels:

A scheme must be approved by resolution of a majority of 75% or more of the votes of theshareholders in each interest class entitled to vote and voting on the question. If, for example, onegroup of shareholders was going to receive different consideration for their shares, then they wouldlikely be a separate interest class. The resolution must also be approved by a simple majority of all of the company’s votingrights. This means that the number of valid votes cast approving the scheme must equate to morethan 50% of the Code company’s total voting rights.

[Brain]

So the Scheme of arrangement gets around the 90% required for a normal takeover situation which I guess minimises the likely cost to EQT for a complete takeover and subsequent delisting. The shareholders have their board to thank for taking away their voting power. Well done board.

It would be very interesting to see the minutes of the board meetings. Is it possible for shareholders to view the minutes when a company is delisted? Are the minutes of board meetings ever available to shareholders?

[winner69]

So the Scheme of arrangement gets around the 90% required for a normal takeover situation which I guess minimises the likely cost to EQT for a complete takeover and subsequent delisting. The shareholders have their board to thank for taking away their voting power. Well done board.

It would be very interesting to see the minutes of the board meetings. Is it possible for shareholders to view the minutes when a company is delisted? Are the minutes of board meetings ever available to shareholders?

You still get to vote Brain ...your vote might even count ;)

Things are lot ‘tidier’ under a Scheme rather than messy hostile takeovers.

[macduffy]

You still get to vote Brain ...your vote might even count ;)

Things are lot ‘tidier’ under a Scheme rather than messy hostile takeovers.

Yes, I wouldn't be too tough on the directors of MET. Schemes of Arrangement are the "modern" way of making takeovers these days - not some invention of the MET board.

[JohnnyTheHorse]

Has anyone heard whispers of who's buying? Is it just large fundies looking to scalp the 15-20 cents or has EQT or another party started buying on market?

[couta1]

Has anyone heard whispers of who's buying? Is it just large fundies looking to scalp the 15-20 cents or has EQT or another party started buying on market? EQT I reckon, I mean would large fundies be interested in scalping this?

[Beagle]

EQT I reckon, I mean would large fundies be interested in scalping this?

Could just as easily be one of the other interested parties building a foothold before launching a higher takeover offer.

[winner69]

Could just as easily be one of the other interested parties building a foothold before launching a higher takeover offer.

Always good to live in hope ....sometimes what you wish for does come true

[Beagle]

Always good to live in hope ....sometimes what you wish for does come true

Doctor told me a few years ago, life is more enjoyable when you look at the glass as being half full. He's right.
Very strong bidding for more than 1.1 million shares at $6.85. Hmmmmm

[King1212]

Well ..15c guaranteed.... the extra is the bonus. Other stocks no guarantee 15c..u might lose half of your investment value

[macduffy]

Well ..15c guaranteed.... the extra is the bonus. Other stocks no guarantee 15c..u might lose half of your investment value

Only "guaranteed" if shareholders don't vote against the takeover. Admittedly, not very likely!

[winner69]

Punters still buying and selling in volume

No news today...look wait for another offer I reckon, assuming one does

[Beagle]

I'm happy to bide my time as I still think there's a good chance of a better deal than the miserable $7 our extremely "astute" directors are so proud of. Might be a few Australians looking to enjoy the Metlifecare lifestyle shortly.

[winner69]

I'm happy to bide my time as I still think there's a good chance of a better deal than the miserable $7 our extremely "astute" directors are so proud of. Might be a few Australians looking to enjoy the Metlifecare lifestyle shortly.

I think you'll be voting NO

[Beagle]

I think you'll be voting NO

Giving our retirement villages away to foreign ownership for less than current net tangible asset backing makes no sense to me. Hope you are keeping a ticket to hear the barking.

The directors recommending a bid that allows for taking any interim dividend off the offer price, is an absolute disgrace.
Not only does the buyer get all the villages in May 2020 at the discounted and depressed level's that existed nearly a year ago, they get 11 months of earnings for absolutely nothing and all the intellectual property, systems and goodwill for absolutly nothing too. No wonder they're keen, they're getting RYM beating growth rates for a material discount to asset backing when RYM shareholders have to pay more than three times asset backing.

Giving our assets away for less than fair value is abhorrent.

[RTM]

Giving our retirement villages away to foreign ownership for less than current net tangible asset backing makes no sense to me. Hope you are keeping a ticket to hear the barking.

The directors recommending a bid that allows for taking any interim dividend off the offer price, is an absolute disgrace.
Not only does the buyer get all the villages in May 2020 at the discounted and depressed level's that existed nearly a year ago, they get 11 months of earnings for absolutely nothing and all the intellectual property, systems and goodwill for absolutly nothing too. No wonder they're keen, they're getting RYM beating growth rates for a material discount to asset backing when RYM shareholders have to pay more than three times asset backing.

Giving our assets away for less than fair value is abhorrent.

I've had Tilt and NZO
Tilt......Independent directors did their job. Look at the price now.
NZO.....Defeated...great....outcome will be known late this year (with luck)
Although SP already doing OK.
I guess there is no chance of this happening with MET ?
Disc: Not a holder

[Beagle]

My view is it became clear in mid spring the Auckland real estate market having been in the doldrums for a fairly lengthy period of time was emerging from its malaise.
The bid is opportunistically timed in that the full effect of a resurgent market has yet to show itself in the financial results of the company.
I'm not surprised there are two other interested parties as its clear the outlook for the sector and especially in Auckland where most of MET assets are located is considerably better going forward.

Who knows what happens from here ? We are yet to discover who the directors will appoint to make what I hope is a thorough review of the valuation of MET.
I hope they don't hurry so we get to see the improved financial performance of the company for the half year to 31 December 2019.
I hope they don't appoint Northington Partners as I have very little respect for the previous work they have done with other listed companies and they place FAR TOO MUCH reliance on simply believing whatever management tell them and of course they have the usual disclaimer in their report saying they have relied upon company representations e.t.c.e.t.c.

Blind Freddy can see that MET has grown underlying earnings at a fast rate in a normal Auckland real estate market, hopefully as much will be obvious to the "independent experts" appointed by the company to report on this.

A case of watch this space and see what happens...I can't see any reason to sell, (especially with two other potential bidders) unless one really needs the money in a hurry. Another 2% of the company shares traded today, or about 4% of the free float...might we see a substantial shareholder notice soon ?
Is someone else quietly building up a stake prior to launching a better offer ?

[limmy]

I think we should all follow Mr. Beagle's lead and refrain from selling.

[couta1]

I think we should all follow Mr. Beagle's lead and refrain from selling. Follow your own Gutometer is the way to go.

[winner69]

Beagle - if interested their are guidelines around appointing independent appraisals - if interested find “Guidance Note - Approval of Persons to Provide Appraisal Reports".

Probably be Grant Samuel or Grant Thornton deal of this size - both are pretty smart and come up with reasonable ranges

[Beagle]

Beagle - if interested their are guidelines around appointing independent appraisals - if interested find “Guidance Note - Approval of Persons to Provide Appraisal Reports".

Probably be Grant Samuel who are pretty smart and come up with reasonable ranges

Thanks Winner, happy to wait and see how all this pans out.

[bohemian]

Thanks for alerting us to this before the bid Beagle, it's turned out quite a windfall for me, so much appreciated. Question though, can the bidder walk away from this at any time or are they committed to buying as many shares as they can at $7.00? Just wondering if too many dig their toes in over the price how risky is that?

[winner69]

Thanks for alerting us to this before the bid Beagle, it's turned out quite a windfall for me, so much appreciated. Question though, can the bidder walk away from this at any time or are they committed to buying as many shares as they can at $7.00? Just wondering if too many dig their toes in over the price how risky is that?

There are a few things that allows the bidder to walk away but essentially only really adverse events ...so unlikely

Scheme of Arrangement - if shareholders vote to accept the offer and the court approves they get 100%....even if 24% voted against it ......so essentially all or nothing.

[Beagle]

Thanks for alerting us to this before the bid Beagle, it's turned out quite a windfall for me, so much appreciated. Question though, can the bidder walk away from this at any time or are they committed to buying as many shares as they can at $7.00? Just wondering if too many dig their toes in over the price how risky is that?

You're welcome. I am very happy that others have benefitted from this. Basically what Winner has said is on the money, they need 75% approval and overseas investment office approval too so its not a done deal yet. Possibly worth noting is that the directors recommendation to accept $7 is conditional on this being within the forthcoming experts report on valuation range and subject to no superior offer from another party.

If there's no better offer for the company and $7 is within the experts valuation range then its highly likely that this will proceed at $7 as it has the support of the directors and key stakeholders owning about 44% and others will be taking note of that and in particular the experts report.

If the experts report as a bottom figure is higher than $7 or there is an offer from one of the two other interested parties at more than $7 then we're even more well positioned than currently.

You can't buy any other listed retirement company shares at less than a 30% premium to its net tangible assets so to be quite honest I don't care if the takeover doesn't happen because they're paying less than the current net tangible assets of the company and I'd really rather own it myself at that price. I bought for the compound average annual growth of 15% per annum and am very happy to enjoy that over the years ahead. I am strongly inclined towards voting against this takeover.

I remain hopeful of a better offer for MET.

[winner69]

No new deal today by looks of it

Wonder if the shakers and movers are even back at work yet

[Beagle]

Nah, they're probably still on a 5 star cruise somewhere, staying in a suite of course and enjoying a good rest.

[winner69]

Fundies still buying for a shortish term positive return, that’s important to them.

No doubt plenty of punters lining up to sell and take the cash now instead of waiting.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346814/314941.pdf

Sheds some light on who is selling into the bidding.
What will be far more interesting is the forthcoming notification of who is buying.

[winner69]

Beagle be proud of Caltex Board ...telling a suitor to bugger off ....they come back with a better offer ....another bugger off but allowing them access to some non-public info encouraging them to offer even more ....and make things exciting enough that another player is really keen as well.

Way to go

[Beagle]

MET boards effort https://www.youtube.com/watch?v=NeAlghzfbec So far they've shown about as much fight as a tired old Labrador looking for a tummy rub.

[winner69]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346814/314941.pdf

Sheds some light on who is selling into the bidding.
What will be far more interesting is the forthcoming notification of who is buying.

One of Devons bigger holdings along with A2

Their last update -

Our recent investment in Metlifecare benefited from the announcement that they had received a non-binding indic- ative offer for the company (its shares finished the month up 21%). Our view is that this business has been notably undervalued for quite some time, rel- ative to both its listed peer group and its underlying asset value. A local investment bank has been appointed by Metlifecare to consider the proposal and we expect to hear further commentary from management and/or their Board in the coming weeks. Irrespec- tive of how this corporate activity develops, we are confident in this invest- ment due to its high-quality portfolio of retirement villages and the growth opportunities that exist in the sector

[Beagle]

Thanks for sharing that Winner.

Another 3.1m shares, about 3% of the free float changed hands today. Plenty of punters cashing up early and moving on to what they think must be greener pastures.

A "dogged approach"is what's required here.

[couta1]

Happy to take the coin and exit, bit of upside here unlike most of the overcooked NZX ,excepting the likes of A2 which is yet to have its run up.

[Beagle]

Happy to take the coin and exit, bit of upside here unlike most of the overcooked NZX ,excepting the likes of A2 which is yet to have its run up.

Yeap, agree 100%, its getting harder to find value on the NZX, (which, not that I needed it), is yet another reason to hang in there and take a dogged approach.

[King1212]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12298609

[mfd]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12298609

NZ herald always gets a little overexcited, Auckland prices are -0.1% for the year according to today's data, annual changes will remove seasonal influences. Good sign, but a little early for excitement. The country as a whole is +4% for the year which is pretty respectable.

[winner69]

Bit quiet on the MET front so far today

Fundies probably still interested in anything that makes a positive so could start buying up big again....even more so as markets come under pressure from escalation of war like activities ...but then again that might be an adverse advent that allows EQT to walk away

Jeez ...that would be a disaster —- in more ways than one