MET - Metlifecare - one for the fundies?

[couta1]

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 Hope you cashed in your chips on this one winner?

[winner69]

Hope you cashed in your chips on this one winner?

Kept a few ...just in case a miracle happens

[couta1]

Kept a few ...just in case a miracle happens Nothing like a bet each way.

[winner69]

Nothing like a bet each way.

Miracle unlikely ....MET Board has let it go too far to make it easy for another bidder to enter the race. That’s assuming there really was another 2 parties seriously interested.

Quite a few hoops for a new bidder to jump through ...probably will put any off.

[Beagle]

https://www.youtube.com/watch?v=dOwjYXgGNow I'm taking a dogged approach, including plenty of growling and barking to come.

[RupertBear]

Hope you cashed in your chips on this one winner?

The Bear has cashed up and funds have been scattered here and there :cool:

[winner69]

https://www.youtube.com/watch?v=dOwjYXgGNow I'm taking a dogged approach, including plenty of growling and barking to come.

Can we compare dogged with pertinacious?

[Beagle]

pertinacious
[ˌpəːtɪˈneɪʃəs]

ADJECTIVE
formal
holding firmly to an opinion or a course of action.
"he worked with a pertinacious resistance to interruptions"
synonyms:
determined · tenacious · persistent · persevering · assiduous · purposeful · resolute · dogged · indefatigable · insistent · single-minded · unrelenting · relentless · implacable · uncompromising · unyielding · tireless · unshakeable · importunate · stubborn · [more]

[King1212]

Beagle..my gut feeling is a done deal...couple fundies have reduced their holding... so decided to cash in the chips and took the opportunity and bought SUM at$8.45....hopefull tmow good update from SUM

[Preston]

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


Hi Winner,

Just a question here on the methodology behind this fund selling.

If they have made such great gains with this position, is this selling that we are seeing by Devon et al merely an adjustment of the risk in their portfolio? I haven’t been involved in a takeover before, is this also another issue where possibly capital gets tied up and trading halted on the stock until a deal has been made?

cheers

preston

[winner69]

Hi Winner,

Just a question here on the methodology behind this fund selling.

If they have made such great gains with this position, is this selling that we are seeing by Devon et al merely an adjustment of the risk in their portfolio? I haven’t been involved in a takeover before, is this also another issue where possibly capital gets tied up and trading halted on the stock until a deal has been made?

cheers

preston

Could well be just a reweighting / reallocation exercise

But selling started the day the $7 offer was announced

They still have over 5% so might be doing a Beagle

[Beagle]

I know its not really related but the new much more uncertain geopolitical environment has me a little more circumspect that I was a couple of days ago.
A wise man hedges his bets so having started buying in the low $4's just 3 months ago, I decided to take half my chips off the table today.
Its currently trading at a price that's just 13 cents shy of $7 that people will have to wait another ~ 4 months before they get the cheque. (Time value of money is a consideration here). Good to hear Trump trying to steer a conciliatory pathway but anything can happen and I think the chances of a better offer for MET in the current geopolitical climate are slightly less than last week. Doesn't hurt to hold some cash in one's portfolio at this stage. I have a fulsome allocation to SUM already so will bide my time and lets see what happens.

I remain hopeful of a better offer for MET but have to accept that's there's a very real chance one won't be forthcoming.

[winner69]

Timely geo-political stuff eh Beagle

[winner69]

Geo-political a term you need to know about in 2020 according to SMH
https://www.smh.com.au/business/the-economy/the-top-10-phrases-you-ll-need-to-understand-the-economy-in-2020-20200108-p53pus.html

At least we know Beagle is up with the play ...even though he might struggle with ‘Extended liquidity operations’

[Jay]

Watch the next deal come out now I have sold my shares - sold all as not worth keeping half of my 'small' lot
But as beagle says waiting around until April not ideal, sure I can do something else with the funds to make up the difference between current price received and $7.00 like putting into sum other share ...maybe

[Beagle]

Beagle..my gut feeling is a done deal...couple fundies have reduced their holding... so decided to cash in the chips and took the opportunity and bought SUM at$8.45....hopefull tmow good update from SUM

Nicely timed.

[King1212]

Hopefully Beagle....now wait n see tomorrow for the quarter update....I could be in trouble if the update is poor....

[winner69]

More solid buying and selling today ...and creeping up to $7

Be funny if it got to $7 in next week or so

[Jay]

Once the deal was announced, I thought it may get a lot closer to $7 within a few days, alas no
As mentioned decided to sell my small parcel another 10 cents or so won't make a big difference

[Beagle]

I think this is the biggest daily volume so far since this proposed deal was announced. I guess many institutional fund managers are back from holidays.

[Brain]

Once the deal was announced, I thought it may get a lot closer to $7 within a few days, alas no
As mentioned decided to sell my small parcel another 10 cents or so won't make a big difference

leaving 10 cents in for the next chap or chapess is not such a bad thing. You probably have done well. Think of it as a late Xmas present for an unknown investor.

[flyer]

Yes, I was thinking that, why for a 13c gain to $7.
Maybe (hopefully) more to come from this, something higher than $7.

[Scrunch]

Yes, I was thinking that, why for a 13c gain to $7.
Maybe (hopefully) more to come from this, something higher than $7.

If the takeover is done and dusted in 4 months, a 13c gain is still 1.9% (before transaction costs) which annualises up at 5.7%. This is lower than which would expect from equity returns which means there is some embedded probability of a higher bid or fund managers now treating it like a high paying bond.

[Beagle]

If the takeover is done and dusted in 4 months, a 13c gain is still 1.9% (before transaction costs) which annualises up at 5.7%. This is lower than which would expect from equity returns which means there is some embedded probability of a higher bid or fund managers now treating it like a high paying bond.

High paying bond makes no sense as there are clearly execution risks with this proposed takeover including Overseas Investment office approval and 75% approval by shareholders to name just two.
The highlighted part of your post is the only possible logical explanation for the current share price. As mentioned before there are two possibilities of this happening.
1. A higher bid from a third party.
2. The pending appraisal report having as the bottom of its fair price range a figure higher than $7.00.

[winner69]

High paying bond makes no sense as there are clearly execution risks with this proposed takeover including Overseas Investment office approval and 75% approval by shareholders to name just two.
The highlighted part of your post is the only possible logical explanation for the current share price. As mentioned before there are two possibilities of this happening.
1. A higher bid from a third party.
2. The pending appraisal report having as the bottom of its fair price range a figure higher than $7.00.

I look forward to this independent appraisal report

Be a brave person to present a report saying fair value was seen as say $7.25 to $7.95

You never know - miracles do happen.

[Beagle]

I look forward to this independent appraisal report

Be a brave person to present a report saying fair value was seen as say $7.25 to $7.95

You never know - miracles do happen.

Hope is a strategy but having a bob each way like you and I have by keeping some and selling some looks like a good pragmatic decision to me :)
You could have quite a few good meals out on the brokerage I paid to sell half though, not that I need them with my waistline after Christmas lol

[Beagle]

1:1 scrip bid would make it hard for anyone else to beat SUM possible other offer :)

[winner69]

1:1 scrip bid would make it hard for anyone else to beat SUM possible other offer :)

SUM would be dumb as buying MET

I’d be selling my SUM shares if they went that way.

[forest]

If I was SUM or another potential acquirer, I would wait until the range comes out and then make my takeover offer. If the range is say $7.25 to $7.95 you pretty much know you can get it for $7.25 unless a bidding war breaks out. If the range starts as low as $7.00 even better.

Mogul I think this could well happen, the present scheme of arrangement has the feel of being a low ball offer, opportunistically made over the holiday period.
Quite likely others will up the offer and it will still be a bargain for them. The last 10 or so trading days volume of shares traded has been unusually high which tells me a better offer is more than likely. :)

[Beagle]

Winner, what is your thinking behind that? I would back SUM management to realise the potential of the assets, especially compared with MET management.


Mogul I think this could well happen, the present scheme of arrangement has the feel of being a low ball offer, opportunistically made over the holiday period.
Quite likely others will up the offer and it will still be a bargain for them. The last 10 or so trading days volume of shares traded has been unusually high which tells me a better offer is more than likely. :)

I agree 100%

[dabsman]

Mogul I think this could well happen, the present scheme of arrangement has the feel of being a low ball offer, opportunistically made over the holiday period.
Quite likely others will up the offer and it will still be a bargain for them. The last 10 or so trading days volume of shares traded has been unusually high which tells me a better offer is more than likely. :)

I'm sitting tight. The offer is way too low.. and we lose nearly a year of revaluations. I also see no reason there is big volume at close to $7. I understand the selling side but the buy side is the interesting part of all this

[Beagle]

Nearly $50m of shares changed hands already today and I doubt the buyers are chasing it so hard with the prospect of making just 11 cents over 4 months :)
(Disc: Starting to wish I hadn't sold half my stake)

[winner69]

Winner, what is your thinking behind that? I would back SUM management to realise the potential of the assets, especially compared with MET management.

Cultural differences, different way of doing things and huge integration risks and a certainty that perceived synergies would never eventuate make this suggestion a dumb idea ......and other reasons

Summerset would be distracted and lose focus on their own development plans (which some would say they are currently struggling with) which would not be good.

I’m sure if SUM acquiring MET is such a good thing it would have happened by now anyway

If it was indeed such a great thing and it happened then the next logical step is Ryman acquiring the Summet outfit with 1 for 2 script offer ..now that would be fun.

For a punter in for a quick buck rather than thinking 5/10 years out SUM making a decent offer would be good news.

[winner69]

Nearly $50m of shares changed hands already today and I doubt the buyers are chasing it so hard with the prospect of making just 11 cents over 4 months :)
(Disc: Starting to wish I hadn't sold half my stake)

I’ve bought back the ones I sold ...that’s not why the volume is so high today :t_up:

Got to be in to win

[Beagle]

SUM's CFO a very bright guy. I would back him and Julian to make a bloody good go out of MET's assets...really not that hard at all to make a better go of them than Sowry and co

[Beagle]

I’ve bought back the ones I sold ...that’s not why the volume is so high today :t_up:

Got to be in to win

You cunning hound.

[forest]

I’ve bought back the ones I sold ...that’s not why the volume is so high today :t_up:

Got to be in to win

You should and deserve to get $8 plus for your shares in my opinion.

[Joshuatree]

You cunning hound.

Slightly more cunning to the folks sitting on their shares not selling any in the first place imo.;)

[King1212]

There will be at least $15m in fine if the deal dropped

[Beagle]

You should and deserve to get $8 plus for your shares in my opinion.

The board are muppets taking less than current NTA. Even an interim dividend reduces the $7 scheme price so earnings for the last 11 months goes for free as well.

Large shareholders had to put pressure on them for them to see that starting a share buy-back in the low $4 range was a good idea when their NTA was about $7.

Pathetic.

[macduffy]

You should and deserve to get $8 plus for your shares in my opinion.

I don't think "deserve" is recognised as a valid concept in investment land.

;)

[Beagle]

14 times the average daily volume yesterday.

[Balance]

14 times the average daily volume yesterday.

Suspect we will find it is a 'friendly' institution accumulating for EQT.

[winner69]

Suspect we will find it is a 'friendly' institution accumulating for EQT.

Probably is ..bugger

Revised my ‘expected return’ down to 720. .....still 33 cents gain not too bad on the ones I bought back ...but heaps to realise yet on the ones I kept.

[Preston]

Suspect we will find it is a 'friendly' institution accumulating for EQT.


Can I ask a questions here.

massive selling volume as you say, price continues to hold or increase. I was thinking to myself just who is buying these millions in shares. Wonder how far from disclosure they might be.

would EQT be gaining here by keeping price around the takeover bid/slightly less and therefore not have to fork out as much for the rest of the shares at $7 ?

And secondly if the deal falls over, then they probably know that they are still undervalued and can make some good gain?

thanks for the thoughts


I do own this company.

[macduffy]

It's quite normal to see high turnover in a "pending" takeover situation. On the one hand there are the "bird in the hand" holders who sell to secure the profit - or to mitigate the loss - and there are those who will buy into a fluid market in the hope of a contested bidding war. I wouldn't be drawing any conclusions on the outcome here, at this stage, although my inclination has always been to buy into a contest!

Disc: Holding.

[Beagle]

8.5 million shares changed hands today which I believe is the highest daily turnover since this process began. 4% of the company's shares, about 8% of the free float in just one day and a VWAP very close to $6.89. Surely we will see a SSH notice showing who is buying in the next few days ?

[Brain]

And secondly if the deal falls over, then they probably know that they are still undervalued and can make some good gain?


I do own this company.

If the deal falls over we still have the same di*kheads running the company so that will be factored in so you can expect the share price to drop.

[limmy]

The deal is extremely unlikely to fall over, because the buyers are paying a rock bottom price (which equates to the value of the NTA). I'm afraid it's looking like a done deal, unless the valuation report exceeds $7 or some other buyer gives a better bid.

I would have thought that since MET owns lots of prime land around the main cities in NZ, the buyer should be prepared to pay a premium, on top of the NTA, (let alone the goodwill.... etc. )

One can't help but feel that the board hasn't tried hard enough in the negotiations, especially when on the 20th Nov announcement, a figure of up to $8 was mentioned, when they rejected the $6.50 offer.

[JohnnyTheHorse]

8.5 million shares changed hands today which I believe is the highest daily turnover since this process began. 4% of the company's shares, about 8% of the free float in just one day and a VWAP very close to $6.89. Surely we will see a SSH notice showing who is buying in the next few days ?

Around 20% of total issued shares have been traded so far and we are yet to see a buying SSH. Suspect a few funds buying up for the scalp and EQT accumulating too. Doubt there's any more to it.

[moimoi]

Much of the reported volume likely to be fake. Same beneficial owner buying and selling on different accounts to create the appearance of volume.

Welcome to algorithmic trading.

[Brain]

Much of the reported volume likely to be fake. Same beneficial owner buying and selling on different accounts to create the appearance of volume.

Welcome to algorithmic trading.

That would be market manipulation. The FMA would be onto that you would think. If they were doing their job that is.

[winner69]

8.5 million shares changed hands today which I believe is the highest daily turnover since this process began. 4% of the company's shares, about 8% of the free float in just one day and a VWAP very close to $6.89. Surely we will see a SSH notice showing who is buying in the next few days ?

Just like mistatea is still waiting for SSH with the huge number of SKT share transactions

Yep only 2 million shares for those over 5% to file a SSH ....anywhere between 1 and 10 million for those under 5% to disclose

Other replies might have the answer for no SSH disclosures

Then today might be the day for a few lol ...who knows

[couta1]

That would be market manipulation. The FMA would be onto that you would think. If they were doing their job that is. Yeah right.

[Beagle]

Market is on fire. I am getting more and more annoyed with the extreme bargain be handed on a silver platter by the directors here.
Talk about rolling over like an old Labrador and playing dead...

[winner69]

Market is on fire. I am getting more and more annoyed with the extreme bargain be handed on a silver platter by the directors here.
Talk about rolling over like an old Labrador and playing dead...

Calm down Beagle — don’t let the stress levels get to you. Being grumpy and annoyed not good for your well-being

I’m sure the MET Board is doing their best for shareholders

The likes of Kim Ellis, Mark Binns, Alistair Ryan and Rod Snodgrass are pretty astute guys. No doubt their colleagues are as well.

With all their backgrounds along with the heaps of advice they’ve been getting the likes of Jarden and other advisors things must be OK

We should be grateful that we are getting what we will .....I reckon the MET share price would still have been less than 6 bucks in a years time without this offer

[Beagle]

Calm down Beagle — don’t let the stress levels get to you. Being grumpy and annoyed not good for your well-being

I’m sure the MET Board is doing their best for shareholders

The likes of Kim Ellis, Mark Binns, Alistair Ryan and Rod Snodgrass are pretty astute guys. No doubt their colleagues are as well.

With all their backgrounds along with the heaps of advice they’ve been getting the likes of Jarden and other advisors things must be OK

We should be grateful that we are getting what we will .....I reckon the MET share price would still have been less than 6 bucks in a years time without this offer

Good advice mate, thanks.

[freddagg]

Market is on fire. I am getting more and more annoyed with the extreme bargain be handed on a silver platter by the directors here.
Talk about rolling over like an old Labrador and playing dead...

There is plenty of interest in the sector so if no one else offers more than $7.00 then it is reasonable to assume that $7.00 is a fair price.
However there is still plenty of time for a better offer to materialise.

[Joshuatree]

Market is on fire. I am getting more and more annoyed with the extreme bargain be handed on a silver platter by the directors here.
Talk about rolling over like an old Labrador and playing dead...

And we all know how bad labradors are at playing dead, their mouths are always open with saliva dripping off their questing tongues ,looking for their next feed like an insinkerator always switched on:t_up:

[Beagle]

And we all know how bad labradors are at playing dead, their mouths are always open with saliva dripping off their questing tongues ,looking for their next feed like an insinkerator always switched on:t_up:

LOL - Sad but true and a very pertinent analogy. The mind boggles as to the size of the Incentive / feed the directors and senior management will get to "promote" this takeover. As you imply, this is a messy business and one wonders who the directors are really currently acting for...

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301258 what is wrong with this pretty picture ?... they're giving this sort of thing away for less than current 2020 NTA

I have a picture for the directors https://www.bing.com/images/search?view=detailV2&id=575B6E6B431C9A9CDA9B5515CB2622364DE4E64D&thid=OIP.W6qBESSxHvP1f3waHqUPqAHaEK&mediaurl=https%3A%2F%2Fi.ytimg.com%2Fvi%2FSjhS7GaQ IIA%2Fmaxresdefault.jpg&exph=720&expw=1280&q=picture+of+angry+beagles&selectedindex=0&ajaxhist=0&vt=0&eim=1,6

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301258...and they're giving this sort of thing away for less than current 2020 NTA

Picture says a thousand words https://www.bing.com/images/search?view=detailV2&id=575B6E6B431C9A9CDA9B5515CB2622364DE4E64D&thid=OIP.W6qBESSxHvP1f3waHqUPqAHaEK&mediaurl=https%3A%2F%2Fi.ytimg.com%2Fvi%2FSjhS7GaQ IIA%2Fmaxresdefault.jpg&exph=720&expw=1280&q=picture+of+angry+beagles&selectedindex=0&ajaxhist=0&vt=0&eim=1,6

Only get a picture of baa_baa on that Herald link

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12301258 what is wrong with this pretty picture ?... they're giving this sort of thing away for less than current 2020 NTA

I have a picture for the directors https://www.bing.com/images/search?view=detailV2&id=575B6E6B431C9A9CDA9B5515CB2622364DE4E64D&thid=OIP.W6qBESSxHvP1f3waHqUPqAHaEK&mediaurl=https%3A%2F%2Fi.ytimg.com%2Fvi%2FSjhS7GaQ IIA%2Fmaxresdefault.jpg&exph=720&expw=1280&q=picture+of+angry+beagles&selectedindex=0&ajaxhist=0&vt=0&eim=1,6

Calm down now

[dabsman]

$7 is getting worse and worse by the day - just like my english

[couta1]

Calm down now I felt calm the day I sold my holding and have done ever since.

[Beagle]

Calm down now

Damm….I forgot to take my blood pressure tablet today...can you tell ? :lol:

[winner69]

Damm….I forgot to take my blood pressure tablet today...can you tell ? :lol:

....and better take a double dose of that Blackmores stuff

[Onion]

I felt calm the day I sold my holding and have done ever since.

I've sold into the calm zone too. Happy to have banked a lot more than the shares were selling for a couple of months ago.

A bird in the hand!

[Beagle]

Only get a picture of baa_baa on that Herald link
LOL ...feeling better now and corrected that link. Glad I sold half...probably a good thing for me and reinvest SUM where else.

[Beagle]

$7.00 bid was announced on 30 December 2019. Just over three weeks on and no improved bid has emerged and no announcement has bene forthcoming from the company as to which party is to prepare the so called "independent" appraisal report. Hmmmm

[BlackPeter]

$7.00 bid was announced on 30 December 2019. Just over three weeks on no improved bid has emerged and no announcement has bene forthcoming from the company as to which party is to prepare the so called "independent" appraisal report. Hmmmm

To be fair - most decision makers are probably only since Monday back at their desks. Plenty of time to go anyway until takeover meeting - and on top of that it might not be the best strategy for somebody with a competing bid to show their cards to early ...

While shareholders would be interested in a bidding war, the same might not be the case for the people who want to make an offer ...

[macduffy]

$7.00 bid was announced on 30 December 2019. Just over three weeks on and no improved bid has emerged and no announcement has bene forthcoming from the company as to which party is to prepare the so called "independent" appraisal report. Hmmmm

It's probably all over bar the shouting but I'm an ardent fan of a possible contest - so I'll sit for now on my small stake.

:mellow:

[Beagle]

To be fair - most decision makers are probably only since Monday back at their desks. Plenty of time to go anyway until takeover meeting - and on top of that it might not be the best strategy for somebody with a competing bid to show their cards to early ...

While shareholders would be interested in a bidding war, the same might not be the case for the people who want to make an offer ...

Fair comment mate. On a trip the other day one of the grandkids in the back seat asked the same age old question that's been asked by generations of kids since the automobile was invented. "Are we there yet" ? I couldn't help myself and replied "if we were there I wouldn't still be driving" but quickly followed it up with "we're two thirds there" understanding that all she really wanted was a progress update. Suppose I'm not much better than my granddaughter lol

[Beagle]

It's probably all over bar the shouting but I'm an ardent fan of a possible contest - so I'll sit for now on my small stake.

:mellow:

There might be some barking to be done as well so I will keep my half stake because I love a good opportunity to have a bloody good grizzle :)

[Onion]

There might be some barking to be done as well so I will keep my half stake because I love a good opportunity to have a bloody good grizzle :)

I love the honesty Beagle :t_up:

[RupertBear]

Well for what its worth Craigs dont believe they will get a better Take Over offer, they also have concerns the transaction may not get OIO approval :mellow:

[Beagle]

Well for what its worth Craigs dont believe they will get a better Take Over offer, they also have concerns the transaction may not get OIO approval :mellow:

Control over a LOT of land and housing would pass and I also hold reservations that OIO approval is a certainty. No issues if SUM other N.Z. company makes a better offer though :)

[kiwico]

Control over a LOT of land and housing would pass and I also hold reservations that OIO approval is a certainty. No issues if SUM other N.Z. company makes a better offer though :)

Possible still an issue even if bought by SUM other company due to the likely number of overseas investors in SUM. You might recall Fletchers applied (https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12236062) to the OIO for residential property reasons despite being an NZ company.

[winner69]

Control over a LOT of land and housing would pass and I also hold reservations that OIO approval is a certainty. No issues if SUM other N.Z. company makes a better offer though :)

SUM seem to get OIO approval for land purchases


Overseas ownership % likely reduced lately with Beagles stake getting bigger.

[winner69]

So were the 10% sold to ‘friendly’ parties or those hoping to do better

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/347373/315538.pdf

[limmy]

So were the 10% sold to ‘friendly’ parties or those hoping to do better

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/347373/315538.pdf
What does this all mean, in layman terms ?

[winner69]

What does this all mean, in layman terms ?

When they announced the deal EQT said that institutions with 22% of the total shares in MET had said they would vote yes to the deal (on top of NZ Superfund signing over their 19.9%)

Since that announcement those who had the 22% appear to have reduced their holdings to about 12%. Those instos still can buy and sell more but have said they will likely vote yes (ubless there’s a bigger offer) but they can change their minds.

Good that EQT are telling us this ...why, only they know why ,.,..maybe they are getting worried they might not get to 75%

[limmy]

This sounds like good news to mum and dad investors ?
i.e. the offer price may have to be increased ?

Thanks for the explanation Winner69, I can understand the announcement better now, second time around reading it.

[Beagle]

An interesting development and curious announcement. Stating the obvious but I would think this slightly lowers the chances of them getting to 75% and slightly enhances the chance of them having to make a higher offer.

[Onion]

An interesting development and curious announcement. Stating the obvious but I would think this slightly lowers the chances of them getting to 75% and slightly enhances the chance of them having to make a higher offer.

I don't follow the argument that it enhances the chance of a higher offer.

At least some of the largest shareholders have been bailing, willing to accept a price below the $7 on the table. Doesn't that signal what the [presumed] sophisticated investor is thinking? I.e.


$7 is the best that we can get; but there is no guarantee of success of that offer, nor is there any sign of a competing suitor at the door; so lock in as much of the recent gain as possible by selling near to $7.



Note: I have sold all of mine using that logic -- not that I would call myself a sophisticated investor!

[mfd]

On the other hand, it may slightly reduce the chance of any offer going through and the SP falling by a dollar or so. NZO and STU being recent examples, and also 'careful what you wish for' examples for those unhappy with the MET board's handling of this offer.

[NOCASH]

On the other hand, it may slightly reduce the chance of any offer going through and the SP falling by a dollar or so. NZO and STU being recent examples, and also 'careful what you wish for' examples for those unhappy with the MET board's handling of this offer.


Good point, does that mean, I should sell now, if the deal doesn't go ahead it means the price will fall into $5.00's again?

Cheers,

[mfd]

Good point, does that mean, I should sell now, if the deal doesn't go ahead it means the price will fall into $5.00's again?

Cheers,

No idea. I'd have thought the most likely result is you get 7 dollars or more in a few months, but the chance of losing a dollar or so is non-zero.

[Beagle]

Having a bob each way, (by selling half), continues to make common sense to me and is a common sense risk management stratagy.

[limmy]

There should be another dividend payment in a couple of months. Some may prefer to collect the dividend first before selling ?

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314714.pdf
Winner reckons any dividend paid comes off the $7 price which seems grossly iniquitous to me. Might be some detail in there if you're keen to have a detailed look.

[weasel]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314714.pdf
Winner reckons any dividend paid comes off the $7 price which seems grossly iniquitous to me. Might be some detail in there if you're keen to have a detailed look.

Considerationmeans NZ$7.00in 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;

[Scrunch]

Considerationmeans NZ$7.00in 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;
Although allowing a dividend is a common takeover sweetener used to create a slightly higher effective price.
This is sometimes needed due to valuation reports or to get sufficient acceptance. Its possibly a bit less likely this time because there are limited/No wasted imputation credits.

[Beagle]

With the percentage declining significantly of institutional shareholders who have in principle agreed to $7, (in the absence of a better offer), I can see this being much more of a fight to get this over the 75% line. A fight means its more likely we'll get some kind of sweetener, either an improved offer or a special divvy.
The half year result in February could be quite a good one given the delivery of a lot of units late in FY19 that will have been selling down in 1H FY20 and could muddy the waters further. I wouldn't rule out the possibility of one of the other interested parties bidding for this once the appraisal report is out.

OIO approval or not is another potential twist in this potential plot.

[macduffy]

In short, we don't know anything more, best to await developments.

:mellow:

[winner69]

Silverblizzard and bull almost have the world ending because of this virus ...at least mini recessions and the old dying ...etc etc

Might be seen as an adverse event and the MET deal is off

[winner69]

UBS bought up big last week

Increased offer on way no doubt


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/347563/315753.pdf

[limmy]

UBS bought up big last week

Increased offer on way no doubt


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/347563/315753.pdf
They must have seen the value in MET, a takeover target with shares trading below their NTA.

[Beagle]

Silverblizzard and bull almost have the world ending because of this virus ...at least mini recessions and the old dying ...etc etc

Might be seen as an adverse event and the MET deal is off

Could be deemed an "adverse event" if it gets really bad and I would think it may also lower the odds on a superior offer.
The world is not going to end as some imply but unless there is truly compelling value on offer...

[JohnnyTheHorse]

Wouldn't be surprised if the selldown in MET by the two funds is directly related to the OCA placement.

[winner69]

The independent report probably won’t be out until after results announcement

They will be able to see what MET have managed to do to the numbers and readjust the valuation range accordingly

Be embarrassing for the Board if it’s a bonza of a result and NTA has gone up to $7.40 ...but then they might ensure it’s bad as report a loss.....and don’t forget they knew the result when they said YES YES please

Who knows but you never know what the money men get up to

[limmy]

Hopefully, we'll be pleansantly surprised on the announcement day. I think it's the 26th of this month. Only about just over 3 weeks away.

[Beagle]

The independent report probably won’t be out until after results announcement

They will be able to see what MET have managed to do to the numbers and readjust the valuation range accordingly

Be embarrassing for the Board if it’s a bonza of a result and NTA has gone up to $7.40 ...but then they might ensure it’s bad as report a loss.....and don’t forget they knew the result when they said YES YES please

Who knows but you never know what the money men get up to

On the other hand there's plenty of time for this virus to grow into what could realistically be described as an "adverse event" and the deal could fall over.

[BlackPeter]

FWIW ... sold this morning out of MET. Not that I am too concerned about the takeover failing, but I see limited further up potential for the share price, but some down potential in case the takeover turns for some reason to custard (like lack of OIO approval or ongoing anti virus fear attacks).

Given the current viral fear mongering tsunami across social media it just might be better to have some more cash at hand to mop up various stock bargains after they have been hammered down rather than waiting for receiving 12 cents more for the share in May ...

Love thy scaremongers and shorters ... well, I don't.

[Beagle]

1. The longer we go on with no superior bid the less likely it is one will emerge. (likelihood of a superior offer is now lower than it was)
2. OIO approval is not a certainty by any means considering the deal involves ceding control over a substantial amount of land and housing to overseas control.
3. The virus is the new wild card and the fine print is quite vague on what constitutes an "adverse event"
4. Major institutional shareholders who had previously agreed to sell at $7 have sold significant parts of their holdings meaning its now less likely that the deal will get 75% shareholder approval
5. The markets are under the pump and I think its less likely a competing higher would be made in the current investment climate.
6. A 12 cent premium represents only an annual return of just over 5.3%, assuming the takeover proceeds are paid out on 31 May 2020.
7. If for any reason this deal falls over I see a potential downside of as low as $5.00

I have also carefully reconsidered the potential rewards and the not inconsiderable risks and decided its time to move on.

[flyer]

Yeah, I been thinking of doing that. If there is not going to be any higher offer or a greater premium than $7, it seems pointless holding for that period for a 12c gain. Maybe sell and use the cash to buy more ATM in a couple of weeks.

[winner69]

UBS still buying ...hmmm

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348080/316309.pdf

[JohnnyTheHorse]

Draft Scheme Booklet and Independent Adviser's Report would have been provided to EQT last Friday, with them providing feedback by today. Of course the offer price would have been within valuers range...

[Beagle]

Draft Scheme Booklet and Independent Adviser's Report would have been provided to EQT last Friday, with them providing feedback by today. Of course the offer price would have been within valuers range...

"Independent" report lol...and BTW, how can you value a company that hasn't yet reported its current half year earnings inclusive of the current significant upswing in the (all important for MET) Auckland property market ? Right there the independence and currency of the so called independent current valuation report must by any objective thinking, be brought into question. That EQT has several days to comment on the draft report before its finalised tells you all you need to know about whether its truly independent or not. Guess who's paying for the preparation of that report folks ? One hint, its not MET.

Anecdotally, from my observations around here houses are selling like hot cakes at the moment in Auckland. Anything that is of sound construction, fairly priced and has a nice aspect to it is selling very quickly. None of that will be reflected in the so called current report.

[winner69]

All going to plan

No worries

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348228/316456.pdf

[peat]

All going to plan

No worries

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348228/316456.pdf


funny that they speculate as to the purchasers intentions.
maybe the purchasers want to block!
because MET only has no reason to believe that the SIA will not be strongly supported by shareholders

[dabsman]

funny that they speculate as to the purchasers intentions.
maybe the purchasers want to block!
because MET only has no reason to believe that the SIA will not be strongly supported by shareholders

Very strange comments talking about trading patterns on the stock - why would they add this? Not like this board is expert at anything - cant even sell their own business competently. They certainly shouldn't become market commentators...

[Beagle]

Very strange comments talking about trading patterns on the stock - why would they add this? Not like this board is expert at anything - cant even sell their own business competently. They certainly shouldn't become market commentators...

Agreed. Bunch of muppets and I wouldn't trust the KordaMentha report to be truly independent either. Looks like this sail boat is on a slow journey to oblivion and I am glad for myself I ended this fiasco early.

[moimoi]

Takeover waived through unimpeded

Speculators told to bugger off by the Chair

Price discovery / tension for companies under offer appears to be nil these days

Hope wording of the "fixed fee for life" agreements Residents signed up to survives the change of ownership

[winner69]

Beagle will getting his coffee made in time to watch this

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348342/316581.pdf

[Beagle]

Certainly will take an interest but busy sniffing out another opportunity or two at present.

[Bjauck]

Is the EQT a done deal now or could EQT unilaterally back down if there is a pandemic or if Coronavirus fears see a further correction in sharemarket prices?

[Beagle]

Is the EQT a done deal now or could EQT unilaterally back down if there is a pandemic or if Coronavirus fears see a further correction in sharemarket prices?

The full scheme agreement is here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314714.pdf
Have a look at clause 14.1 Bidder may terminate the agreement....
and in particular 14.1 (c) a material adverse change occurs

I have sold so its beyond my brief to try and make a call on whether a world-wide pandemic might lead to "a material adverse change"...but I would have thought there's at least some chance it might...suppose it depends if a pandemic occurs and how bad the economic effects are on MET ?

[Bjauck]

The full scheme agreement is here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/346608/314714.pdf
Have a look at clause 14.1 Bidder may terminate the agreement....
and in particular 14.1 (c) a material adverse change occurs

I have sold so its beyond my brief to try and make a call on whether a world-wide pandemic might lead to "a material adverse change"...but I would have thought there's at least some chance it might...suppose it depends if a pandemic occurs and how bad the economic effects are on MET ?
Thanks. A "material adverse change" seems quite a broad and undefined. Does the material change have to relate specifically to Metlifecare or could a broader market or economy-wide material change be adequate justification to terminate...

[Beagle]

Thanks. A "material adverse change" seems quite a broad and undefined. Does the material change have to relate specifically to Metlifecare or could a broader market or economy-wide material change be adequate justification to terminate...

Good question.

[peat]

A party entitled to waive, or to join in the waiver of, a Condition may do so in its absolute discretion

[peat]

A party entitled to waive, or to join in the waiver of, a Condition may do so in its absolute discretion

on that basis I have shorted this company as well.

[Beagle]

Put a stop in at $7.01, very unlikely to be hit lol

[dabsman]

Put a stop in at $7.01, very unlikely to be hit lol

I'm out. Bank a very nice profit on this. I don't see anything favourable happening for this from now on. Either it will complete at $7 or they will pull out and the price will collapse I'm thinking. Will cover the bleeding on all my other holdings today haha

[peat]

on that basis I have shorted this company as well.

I was probably a bit rash, according to the Scheme Implementation Agreement


Material Adverse Change means any matter, event, condition or change in circumstances or thing which occurs or is announced, and which is not an Excluded Event, (each a Specified Event) and which individually, or when aggregated with all other Specified Events, reduces or is reasonably likely to reduce:
(a) the consolidated net tangible assets of the Target Group taken as a whole by at least NZ$100 million; or
(b) the consolidated underlying net profit (including non-recurring items and calculated using the same accounting policies and methodologies of the Target Group in place as at the date of this agreement) of the Target Group in any financial year (in the FY20F year, being as set out on page 49 of the management presentation dated 4 December 2019) by 10% or more against what it would reasonable have been expected to be but for the Specified Event(s);
provided that such event, condition, matter, or change in circumstance is not the result of:
(c) a matter, event, condition or change in circumstance, to the extent that it was fairly disclosed to Bidder in the Due Diligence Materials or by Target through the NZX market announcements platform two Business Days before the date of this Agreement;
(d) done or not done at the written request or with the written approval of Bidder;
(e) resulting from the actual or anticipated change of control of Target contemplated by the Transaction;
(f) resulting from changes in general economic conditions, the publicly traded securities market in general or law; and
(g) resulting from changes in generally accepted accounting policies or the judicial interpretation of them,
provided however, that with respect to clause (f), such matter does not have a materially disproportionate effect on the Target Group;



So, the Bidder is possibly unable to withdraw based on Coronavirus because there is no Coronavirus in NZ AND because they cannot withdraw based on general economic conditions

[Beagle]

Give it time...

[freddagg]

I see UBS (11.7%), Morgan chase (5.01%) and Credit Suisse (5.03) are building substantial holdings in MET.
Why would that be? a possible 1% return in a couple of months cannot be enough reason.

[Beagle]

I see UBS (11.7%), Morgan chase (5.01%) and Credit Suisse (5.03) are building substantial holdings in MET.
Why would that be? a possible 1% return in a couple of months cannot be enough reason.

What's the bet they all talk to each other too ! Pretty effective blocking stake ! Bound to be at least 3.3% of other shareholders think the takeover offer is pathetic.

[freddagg]

What's the bet they all talk to each other too ! Pretty effective blocking stake ! Bound to be at least 3.3% of other shareholders think the takeover offer is pathetic.

So if they successfully blocked the sale what would their options be to then make a profit?

[Beagle]

So if they successfully blocked the sale what would their options be to then make a profit?

Back room deal before the vote that would probably go something like this...Hey guys, I know you had some major shareholders who were wimpish enough to give their shares away at $7 because they had held forever and a day and were distressed long time holders so anything would do...but guess what, they've sold out on market and we're the new kids on the block and $7 simply won't cut the mustard any more. You know you're getting a bargain even at $7.40 so cough up the goods and lets be done with this.

[macduffy]

That sounds good, Beagle! Let's hope, though, that EQT don't come out with a SSN that shows that UBS, Morgan etc were buying as EQT's nominee. Sometimes, those SSN's take a few days to surface.

:ohmy:

[freddagg]

Back room deal before the vote that would probably go something like this...Hey guys, I know you had some major shareholders who were wimpish enough to give their shares away at $7 because they had held forever and a day and were distressed long time holders so anything would do...but guess what, they've sold out on market and we're the new kids on the block and $7 simply won't cut the mustard any more. You know you're getting a bargain even at $7.40 so cough up the goods and lets be done with this.

I assume you are thinking that this deal would not be offered to the rest of the shareholders.

[Beagle]

I assume you are thinking that this deal would not be offered to the rest of the shareholders.

Above post is pure speculation on my part...that said any amended deal if it happens, would have to be offered to all shareholders.

[freddagg]

Above post is pure speculation on my part...that said any amended deal if it happens, would have to be offered to all shareholders.

Thank you for your thoughts Mr Beagle. Its all a bit complicated for my simple farmer brain, will be interesting to see how it plays out.

[Snow Leopard]

HY out. :confused:

Not epic. :(

$7 it is then. :p

[Beagle]

Very "convenient" that NTA is exactly $7. Does anyone else think that's a "remarkable coincidence" ?
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/348968/317506.pdf
Chances of a competing superior offer in the current market environment are virtually NIL. Overall, this is another set of financial statements, just like SUM yesterday that really underwhelms.

[Beagle]

Another story of underwhelming new sales of just 54 vs new units delivered of 81. New sales flat/declining for years and new sales margin % halved over the last 4-5 years. No wonder they are waving the white flag at NTA.

And that after "delivering" (which we now all know is code speak for building but not selling), a huge increase in new units last year that remain unsold.
I think the market is totally saturated with supply and will be for the foreseeable future. Good times gone in this sector for a few years ?

[macduffy]

More evidence that the retirement village sector has got a bit ahead of current demand. Incidentally, though, a reliable source tells me that the Ryman Malvina Major village in Khandallah is at 100% occupancy.

[Beagle]

Good point. When the market is oversupplied you really see the benefit of having the best brand, product, service and reputation in the sector, i.e. Ryman. Even though Ryman’s new sales have also been not that strong, based on desirability, I would expect them to outperform competitors. More than priced in to share price though.

Agreed. Their 20% cap on ORA fees is more attractive than others and they pioneered the continuum of care. That said it doesn't appear to have helped their sales much and their shares are priced on very stretched metrics. Fact is from what I have heard, that most people want to buy a retirement unit pretty close to where they used to own their home.

[peat]

No divi either, I guess we knew that, but still.
I reckon the bidder will pull out if they have any possibility of doing so. They probably dont, but will certainly get an opinion on the matter. It would be worth the break fee esp if markets continue to re-rate downwards.

[Beagle]

You could be right Peat, especially if the markets keep on tanking.

Interestingly on the supply side issue, I note Arvida have a major ramp up in their build rate this year. Will they be the exception or will that be more proof the market is totally awash with unsold units ?

[winner69]

Rather than supply being the problem is it possible that demand has fallen away

Retirement living theae days only affordable for the rich and famous?

[trader_jackson]

I've said this once, I've said this a thousand times... it is about balancing care side of things with the units side of things.

You can't have a crap and/or small care operation and be largely units... eventually people aren't too keen on being told "when the time comes and you need care, well we might try fit you in otherwise you'll have to go down the road and move out as our care side of things is pretty small here [at the village - aka good luck to you sir when you need more than just a unit!]" (this is the approximate words that came out of sum villages - no joke)... this is what MET and SUM are. They have a care operation, but relative to their units it is pretty small.

You also can't be too reliant on care otherwise things get squeezed (eg how ARV and OCA were when they listed, and ARV has now greatly expanded their units side of things, and continues to do so, as does OCA... unfortunately OCA doesn't seem to have great cost controls when it comes to their care side of things in recent time)

You have to have a balance... a real continuum of care... this is what ARV, OCA and RYM are doing well, and ARV and RYM are doing really well (aka making more and more money out of the care side).

Because that real continuum of care is what is actually driving demand and will continue to do so as the population ages and has more variety of villages to select from (and I say real as MET has 4064 ILU's, and 934 care beds, apartments and suits - aka for not even 20% of the operation is care, meaning if 5 people need to get care at once, only 1 of them might be able to stay in the same village, the other 4 have to go elsewhere). We are starting to see this with serious slow downs at MET and SUM... why go to one of these villages, have the uncertainty of likely not getting into care when you need it most,when you can go down the road to an ARV, RYM or OCA village that 'has it all?'

Sum people on this thread totally ignored the increasingly obvious value proposition of having a good, fairly large (but not too large) care operation (that is ideally profitable) as part of ones villages and instead thought the more units one could pump out, the better it would be - how wrong this is turning out to be... so yes, demand has fallen away for villages that are increasingly inadequate at catering for the changing needs of that demand... and likely increased at those villages that are increasingly adequate at catering for the changing needs of that demand... that is why I have never owned MET or SUM as the music as always going to stop at some point.

Disclosure: I have been saying this for years and am glad fairly recent results from the sector have finally validated this.

[Beagle]

Fair comment BUT you have to wonder why Ryman have been struggling to sell many units in recent years especially seeing as they are the pioneers of the continuum of care model and only charge a 20% DMF fee ? To me this suggests if the market leader is struggling to sell their new units the entire market is massively over supplied.

I guess we will find out in due course if ARV really are the exception to the rule. Time will tell but for me RYM are the (very overpriced) gold standard and if they are struggling to sell, all will struggle to sell.

[Bjauck]

Rather than supply being the problem is it possible that demand has fallen away

Retirement living theae days only affordable for the rich and famous? Maybe the ORA system has had a bad rap - in so far as real estate inflation gains have not accrued to the resident. Perhaps a new method of ownership/leasehold needs to be offered?

[Beagle]

I would think the chances of this deal not proceeding due to the black swan event and its effects on the global markets is now VERY REAL.
The upside simply is very limited at 11 cents. NTA is "very strangely" exactly $7. Downside potentially as bad as $2 - $3. SELL

[676767]

I would think the chances of this deal not proceeding due to the black swan event and its effects on the global markets is now VERY REAL.
The upside simply is very limited at 11 cents. NTA is "very strangely" exactly $7. Downside potentially as bad as $2 - $3. SELL

Agreed, the risk at the moment doesn't seem worth the extra 10c. I've sold since sold out.
Although I'm more curious than anything to see these big players buying up large. Will happily watch from the side lines.

[JohnnyTheHorse]

I sold down my position over the last week. In these market conditions a better offer is extremely unlikely. The risk/reward is too skewed for me to continue holding.

[Beagle]

Anyone else noticed the share price decline ? $6.84 today so arbitrage to the $7.00 takeover has expanded out to 16 cents despite the shorter timeframe to the proposed takeover.

With the very rapid spread of Covid 19 might this takeover be at real risk now ? What happens to other stocks in this sector if this takeover is withdrawn ?

Weren't institutions and other shareholders expecting about 1.5 Billion in cash from this takeover to be reallocated elsewhere in the market, one presumes predominantly among other sector players ?

Any implications for the market overall if this offer is withdrawn ?

[676767]

Anyone else noticed the share price decline ? $6.84 today so arbitrage to the $7.00 takeover has expanded out to 16 cents despite the shorter timeframe to the proposed takeover.

With the very rapid spread of Covid 19 might this takeover be at real risk now ? What happens to other stocks in this sector if this takeover is withdrawn ?

Weren't institutions and other shareholders expecting about 1.5 Billion in cash from this takeover to be reallocated elsewhere in the market, one presumes predominantly among other sector players ?

Any implications for the market overall if this offer is withdrawn ?

Considering the boost the others in this sector got once the offer was announced, you would think they would drop at a similar rate if the offer is revoked, although looks like OCA has dropped by itself anyway.

[winner69]

Way UBS etc been mopping up maybe most smaller shareholders already deserted the ship.

The $1.6 billion in big boys hands ...they may or may not reinvest this in the sector

[peat]

Anyone else noticed the share price decline ? $6.84 today so arbitrage to the $7.00 takeover has expanded out to 16 cents despite the shorter timeframe to the proposed takeover.

With the very rapid spread of Covid 19 might this takeover be at real risk now ? What happens to other stocks in this sector if this takeover is withdrawn ?

Weren't institutions and other shareholders expecting about 1.5 Billion in cash from this takeover to be reallocated elsewhere in the market, one presumes predominantly among other sector players ?

Any implications for the market overall if this offer is withdrawn ?

Recall I posted on this earlier, and considered they couldn't really pull out of the deal just because of a market slide.

[peat]

bump so you can form your own opinion on the possibility of a T/O withdrawl by virtue of a Material Adverse Change - boldened areas from me


According to the Scheme Implementation Agreement


Material Adverse Change means any matter, event, condition or change in circumstances or thing which occurs or is announced, and which is not an Excluded Event, (each a Specified Event) and which individually, or when aggregated with all other Specified Events, reduces or is reasonably likely to reduce:
(a) the consolidated net tangible assets of the Target Group taken as a whole by at least NZ$100 million; or
(b) the consolidated underlying net profit (including non-recurring items and calculated using the same accounting policies and methodologies of the Target Group in place as at the date of this agreement) of the Target Group in any financial year (in the FY20F year, being as set out on page 49 of the management presentation dated 4 December 2019) by 10% or more against what it would reasonable have been expected to be but for the Specified Event(s);
provided that such event, condition, matter, or change in circumstance is not the result of:
(c) a matter, event, condition or change in circumstance, to the extent that it was fairly disclosed to Bidder in the Due Diligence Materials or by Target through the NZX market announcements platform two Business Days before the date of this Agreement;
(d) done or not done at the written request or with the written approval of Bidder;
(e) resulting from the actual or anticipated change of control of Target contemplated by the Transaction;
(f) resulting from changes in general economic conditions, the publicly traded securities market in general or law; and
(g) resulting from changes in generally accepted accounting policies or the judicial interpretation of them,
provided however, that with respect to clause (f), such matter does not have a materially disproportionate effect on the Target Group;





disclaimer - still short , lol possibly the worst share to have a short position in (so far)

[Beagle]

I am not going to try and pretend to be a commercial lawyer but I would have thought "reasonably likely to reduce underlying net profit of the target group in any financial year by 10% or more" could come into this and be their "escape clause".

For example, before last week Westpac economists were predicting a 10% increase in house prices for 2020. They came out just the other day and predicted no net increase now. I will leave others to ponder whether average house prices in Auckland of say $900K being predicted to move up to $990K, but now not, along with possible sales volume reductions might be reasonably likely to reduce MET's underlying profit by 10% or more in FY21.

Possibly a very good short, although I think you would have been far better to stay on the AIR ski slope :p

[peat]

I am not going to try and pretend to be a commercial lawyer but I would have thought "reasonably likely to reduce underlying net profit of the target group in any financial year by 10% or more" could come into this and be their "escape clause".

For example, before last week Westpac economists were predicting a 10% increase in house prices for 2020. They came out just the other day and predicted no net increase now. I will leave others to ponder whether average house prices in Auckland of say $900K being predicted to move up to $990K, but now not, along with possible sales volume reductions might be reasonably likely to reduce MET's underlying profit by 10% or more in FY21.

Possibly a very good short, although I think you would have been far better to stay on the AIR ski slope :p

there was very little upside which I liked.
I agree with your legal interpretation as that being the most likely area for focus, however would question whether underlying net profit includes revals

[Beagle]

No it doesn't but the real estate market booming and going up 10% is a very different state of affairs to what might eventuate now and make it much harder to sell per se, and at reasonable prices.
Also people might feel safer staying in their homes while this crisis is in full swing so deferral of discretionary moves to a retirement village is very much on the cards so if they struggle to sell new units and resell ones that are vacant and more that will become vacant with the virus, could a reasonable person draw the conclusion or at the very least make a case that underlying profit could be impacted by 10% or more ?

I like your short with almost no upside risk. Certainly not a legal interpretation though...I'll leave that to the high priced commercial lawyers making $1m+

[Beagle]

There's now a very high chance this deal doesn't happen, in my opinion. I think its now very easy to make a strong legal case that a world-wide pandemic is likely to affect FY21 underlying profit by 10% or more. That's their "get out of jail free card" right there. This has major implications for the rest of the sector that bounded up very strongly on initial news of the proposed takeover.

[Scrunch]

There's now a very high chance this deal doesn't happen, in my opinion. I think its now very easy to make a strong legal case that a world-wide pandemic is likely to affect FY21 underlying profit by 10% or more. That's their "get out of jail free card" right there. This has major implications for the rest of the sector that bounded up very strongly on initial news of the proposed takeover.

Given the scale of the negative sharemarket falls, the $100m asset vale reduction is also likely to be an easily met test. Disc. No longer holding

[peat]

its quite a complicated clause with those parameters specified such as 100M NTA reduction or 10% fall in underlying net profit because all this is specifically excluded if it is a result of

changes in general economic conditions, the publicly traded securities market.

Is it the virus or the change in economic conditions? The contract might allow the virus to be an adverse event but the virus hasn't even hit NZ resthomes yet so that might be a stretch to argue. And you cant blame economic conditions even if they are a result of the virus because they are excluded

But that exclusion then has the possibility of being excluded with a further proviso being if
such matter does not have a materially disproportionate effect on the Target Group

Go figure !

Anyway for me the risk is low and the reward is potentially high so I like the odds on being short even though I am not necessarily convinced that the deal will be pulled. it just could be !

[Beagle]

I am tempted to play at being an amateur commercial lawyer but I fear it might make my brain hurt :)
All I will say is if there's a will to do something, or stop doing something as the case may be, there's usually some fine print condition somewhere that's been written with sufficient ambiguity that they can squeeze through, the devil as they say, is usually in the detail !

One thing is for sure, you are very safe from a competing superior offer !

[peat]

looks like no one believes the take over will eventuate now.
I've closed out now at after making 80c per share. Probably go a lot further though given how it was priced before the t/o bid

[winner69]

looks like no one believes the take over will eventuate now.
I've closed out now at after making 80c per share. Probably go a lot further though given how it was priced before the t/o bid

Well done

I think you right in that it looks like the acquisition is dead in the water

[Beagle]

looks like no one believes the take over will eventuate now.
I've closed out now at after making 80c per share. Probably go a lot further though given how it was priced before the t/o bid

Nice gain, congrats. I suspect this will test its previous low of $4.20 last year when the takeover is withdrawn.

[Bjauck]

Well done

I think you right in that it looks like the acquisition is dead in the water First week of March JP Morgan Chase were accumulating an extra 1.5% of the shares. Presumably they were thinking the takeover would still go ahead.

However if a week is a long time in politics it may be even longer with the stock market! I wonder what next week will bring...

Disc: I sold my holding in the first week of March. So maybe they bought them.

[Scrunch]

Nice gain, congrats. I suspect this will test its previous low of $4.20 last year when the takeover is withdrawn.

You are being unusually cautious on your price decline estimates. If we go back 6 months to 13 Sep 2019 we had the prices below. Today's close and the movements since then are also given.
MET 4.46. Today's close 5.90 (+32%)
SUM 6.35. Today's close 5.67 (-10.7%)
RYM 13.14. Today's close 11.70 (-11.0%)
OCA 1.02. Today's close 0.80 (-21.6%)

If MET was to to decline by what SUM/RYM have declined by over the last six months then your are looking at $3.98. If they fall by what OCA has fallen by, you are looking at $3.50.

Disc - sold out late Jan/Early Feb

[Beagle]

You are being unusually cautious on your price decline estimates. If we go back 6 months to 13 Sep 2019 we had the prices below. Today's close and the movements since then are also given.
MET 4.46. Today's close 5.90 (+32%)
SUM 6.35. Today's close 5.67 (-10.7%)
RYM 13.14. Today's close 11.70 (-11.0%)
OCA 1.02. Today's close 0.80 (-21.6%)

If MET was to to decline by what SUM/RYM have declined by over the last six months then your are looking at $3.98. If they fall by what OCA has fallen by, you are looking at $3.50.

Disc - sold out late Jan/Early Feb

Yes, as mentioned I suspect it will test it previous support line of $4.20. In another thread I have added this to my Christmas shopping list at $3.50. I wound need a discount of 50% to NTA to get interested because I think senior management are ostensibly, incompetent. At $3.50 hopefully somewhere down the track someone else will try and take them over again.

[trader_jackson]

You are being unusually cautious on your price decline estimates. If we go back 6 months to 13 Sep 2019 we had the prices below. Today's close and the movements since then are also given.
MET 4.46. Today's close 5.90 (+32%)
SUM 6.35. Today's close 5.67 (-10.7%)
RYM 13.14. Today's close 11.70 (-11.0%)
OCA 1.02. Today's close 0.80 (-21.6%)

If MET was to to decline by what SUM/RYM have declined by over the last six months then your are looking at $3.98. If they fall by what OCA has fallen by, you are looking at $3.50.

Disc - sold out late Jan/Early Feb

And ARV $1.43 to $1.31 (-8.4%)

Given what has gone on in the rest of the sector, as well as MET traditionally being 'cheap' compared to the other 4 listed, anything above $4 (should the takeover indeed fall through) would be surprising to me.

Sorry just thought I had to post given it looked like ARV was somehow missed out.

[Beagle]

I have ARV on my Christmas shopping list at $1. Just letting you know they're on my radar. The MET deal is almost certainly dead with serious flow on effects for the others. Also almost certain is that the virus will get into some retirement villages around the country and the effects will be devastating if it spreads within retirement communities. They will end up with lots of vacant units and the oversupply situation will become chronic as the attractiveness and relative safety of people staying in their own homes will be front and central in old folks minds for many years to come.

The market is already significantly over supplied in my view and this situation could be about to get much worse. SUM is probably the worst positioned to withstand a possible severe "storm" with its already strongly growing unsold stock level's and vast land bank with consequent very high debt level's. I am going to be extremely cautious with any possible reentry into SUM and would need to see a confirmed new uptrend based on improved sales results. That's not going to happen any time soon, in my view so although the share price has been savaged, its not enough...not anywhere near enough to get me SUMwhat interested.

I think the whole sector, (with the possible exception of RYM) could potentially end up trading at quite a significant discount to NTA.

[Bjauck]

I have ARV on my Christmas shopping list at $1. Just letting you know they're on my radar. The MET deal is almost certainly dead with serious flow on effects for the others. Also almost certain is that the virus will get into some retirement villages around the country and the effects will be devastating if it spreads within retirement communities....
Perhaps retirement villages are also best situated to be able to control entry and thus to try to allay infection. If there is compulsory community self isolation as in Italy or China, then Perhaps there could be better co-ordination of services than would be available for elderly spread out in the community and perhaps separated from family overseas in other parts of the country.

With respect to the rest homes in retirement villages, hopefully the elderly there will be better monitored than if they had remained in their home homes. Medical treatment is on hand and perhaps isolation more rapidly enforced. I am not convinced that risk of infection would be greater within a rest home with good hygiene practices, and even less convinced that elderly in retirement villages units would be more at risk than if they lived elsewhere.

[BlackPeter]

Perhaps retirement villages are also best situated to be able to control entry and thus to try to allay infection. If there is compulsory community self isolation as in Italy or China, then Perhaps there could be better co-ordination of services than would be available for elderly spread out in the community and perhaps separated from family overseas in other parts of the country.

With respect to the rest homes in retirement villages, hopefully the elderly there will be better monitored than if they had remained in their home homes. Medical treatment is on hand and perhaps isolation more rapidly enforced. I am not convinced that risk of infection would be greater within a rest home with good hygiene practices, and even less convinced that elderly in retirement villages units would be more at risk than if they lived elsewhere.

This makes a lot of sense, but don't destroy bulls / beagles nice ramp down story. Remember winner saying - its not about the numbers, but about the story ... and currently we are just in ramp down mode :):

[mondograss]

Just because these companies have a big land bank etc, doesn’t mean they need to use it for retirement units. They could for example sell the land again, or subdivide and put a chunk into regular housing or some sort of commercial/retail development.

[peat]

MET still insisting the takeover will happen!

As I mentioned the market falls are not a trigger in themselves to abandonment of the Scheme and apparently the purchasers are still co-operative etc... hmmm we will see.
Glad I'm out (again)

[trader_jackson]

MET still insisting the takeover will happen!

As I mentioned the market falls are not a trigger in themselves to abandonment of the Scheme and apparently the purchasers are still co-operative etc... hmmm we will see.
Glad I'm out (again)

Almost seems like MET is demanding the takeover happens... doesn't really give alot of confidence that it will.

[Beagle]

MET still insisting the takeover will happen!

As I mentioned the market falls are not a trigger in themselves to abandonment of the Scheme and apparently the purchasers are still co-operative etc... hmmm we will see.
Glad I'm out (again)

Following this one with interest. Despite what they say I reckon this is at best, 50/50. I see fair value at $4 if it doesn't happen and $7 if it does so $5.50 seems about right, however my gut says stay away even if it falls to that price. Pretty easy to make a case that underlying profit is reasonably likely to fall by 10% or more in FY21. I think they will make that case and argue it out in court if they have too. Hard for the company to sue for damages because the break fee is prescriptive in its quantum and what losses has the company itself incurred that haven't been compensated by the break fee ? Would appear then it would require a class action by shareholders and good luck with that. My money is on them walking away. Companies trading at a discount to NTA, not at NTA, are not going to be thin on the ground going forward in my opinion.

[Joshuatree]

Certainly correcting commentsand injecting confidence or trying (pretty hard in these situs)

Contrary to a recent broker commentary, APVG is not entitled to elect to
cancel the SIA at its option and pay a reverse break fee. The reverse break
fee is only payable if APVG is in material breach of, and Metlifecare
terminates, the SIA.

APVG has continued to work co-operatively with Metlifecare to finalise
arrangements for the meeting of shareholders to approve the scheme, scheduled
for 29 April 2020. Metlifecare also understands APVG's application for
approval under the Overseas Investment Act remains on track to be determined
prior to the shareholders' meeting

met (https://online.asb.co.nz/ost/99B3708295B649033B4D42A197597882/companyannouncements/showannouncement/nzx/met?issuercode=met&number=349947&ispdf=false)

[Scrunch]

Certainly correcting commentsand injecting confidence or trying (pretty hard in these situs)

Contrary to a recent broker commentary, APVG is not entitled to elect to
cancel the SIA at its option and pay a reverse break fee. The reverse break
fee is only payable if APVG is in material breach of, and Metlifecare
terminates, the SIA.

APVG has continued to work co-operatively with Metlifecare to finalise
arrangements for the meeting of shareholders to approve the scheme, scheduled
for 29 April 2020. Metlifecare also understands APVG's application for
approval under the Overseas Investment Act remains on track to be determined
prior to the shareholders' meeting

met (https://online.asb.co.nz/ost/99B3708295B649033B4D42A197597882/companyannouncements/showannouncement/nzx/met?issuercode=met&number=349947&ispdf=false)

What happens if APVG vote against the scheme. How many shares do they beneficislly control?

[Beagle]

Companies trading under NTA are rapidly increasing in number on the NZX. OCA, SUM KPG just some companies now trading at a discount to NTA. There will be a lot more soon. They probably won't pull the rip cord on their escape parachute until the last minute in the hope the markets recover.

[Beagle]

Well done

I think you right in that it looks like the acquisition is dead in the water

Market needs another statement that the deal is definitely still going ahead ;)

[flyer]

35% discount now today of the stated $7 takeover price. Surely cant be going ahead now due to dropping this low but if it still is then MET would need to be a screaming buy at this price, announcement must be due soon. Due to the size of the drop either shareholders panicking or deal not going ahead.

[Beagle]

Independent assessment report is supposed to be released to shareholders sometime late March. I'd be very surprised if this still went ahead. Companies in this sector trading at a discount to NTA are now common, eg OCA at 45% discount to NTA, heck even T.'Js favourite ARV trading at a discount to NTA as is no growth SUM.
Heck the only one not trading at a discount to NTA is RYM, but the way it is dropping that might change pretty soon !

[peat]

35% discount now today of the stated $7 takeover price. Surely cant be going ahead now due to dropping this low but if it still is then MET would need to be a screaming buy at this price, announcement must be due soon. Due to the size of the drop either shareholders panicking or deal not going ahead.


The announcement wont define the result though will it? at any stage now or later this deal could fall over no matter what either of the parties say...

[Beagle]

Late Friday afternoon, many will have missed this. https://www.nzx.com/announcements/350378
I remain deeply sceptical this deal will proceed as does the market. I think it would be quite easy to defend the proposition that this virus is likely to have a >10% effect on underlying profit in FY21. Reassurance that things are tracking okay at the moment is one thing...the impact on the business going forward is something else.

[dubya]

I don't hold but at $4 now circa 43% below the $7 takeover price (should it go ahead)

This from 8 days ago: https://www.nzx.com/announcements/349947

Is this going to be a bit like the Tegal takeover?

If buying MET at this price and the takeover goes ahead big return. If buying MET at this price and the takeover doesn't go ahead (price stay about where it is now or drop slightly?) ya still end up with shares in a well performing retirement company.

What am I missing? Comments would be appreciated.

[peat]

a well performing retirement company.



This is the issue. Hmmm Management haven't done too well when you look at it.

[Balance]

I don't hold but at $4 now circa 43% below the $7 takeover price (should it go ahead)

This from 8 days ago: https://www.nzx.com/announcements/349947

Is this going to be a bit like the Tegal takeover?

If buying MET at this price and the takeover goes ahead big return. If buying MET at this price and the takeover doesn't go ahead (price stay about where it is now or drop slightly?) ya still end up with shares in a well performing retirement company.

What am I missing? Comments would be appreciated.

https://www.nzx.com/announcements/350713

APVG has advised Metlifecare it is monitoring the COVID-19 pandemic and the implications of it in New Zealand. APVG has termination rights under the SIA, including termination rights in the event of a “Material Adverse Change” (as defined in the SIA) (MAC). Metlifecare does not consider that a MAC has arisen at this point in time but can give no assurance that a MAC might not arise in the future. APVG continues to assess the implications of COVID-19 and reserves all of its rights under the SIA and at law"

In other words, takeover at the current $7 is off imo - try enforcing a takeover when the other party does not want to go ahead. 25% of the world in lockdown easily constitute a MAC!

Actually, those in the know from a legal & contractual point of view probably has been selling down.

[trader_jackson]

https://www.nzx.com/announcements/350713

APVG has advised Metlifecare it is monitoring the COVID-19 pandemic and the implications of it in New Zealand. APVG has termination rights under the SIA, including termination rights in the event of a “Material Adverse Change” (as defined in the SIA) (MAC). Metlifecare does not consider that a MAC has arisen at this point in time but can give no assurance that a MAC might not arise in the future. APVG continues to assess the implications of COVID-19 and reserves all of its rights under the SIA and at law"

In other words, takeover is off imo.

Yup, MET have gone from saying "its all on, they can't call it off" to "actually yea they can call it off and probably will".

[Balance]

Yup, MET have gone from saying "its all on, they can't call it off" to "actually yea they can call it off and probably will".

Extremely remissive of the directors NOT to have updated the market earlier - share price told the story.

[Bjauck]

Extremely remissive of the directors NOT to have updated the market earlier - share price told the story. I agree very unfortunate. Small shareholders would have acted or not acted on their previous statement. Should they have said nothing previously as it was still an evolving situation?

[JohnnyTheHorse]

You guys need to refer back to the SIA. Material Adverse Changes are:

1. NTA drop by >$100m
2. NPAt drop by >10% of forecast

Most notably these cannot be because of "changes in general economic conditions, the publicly traded securitiesmarket in general or law" provided that "such matter does not have a materiallydisproportionate effect on the Target Group".

So the first question is will NTA or NPAT drop to trigger it? If yes, has the general economic conditions had a disproportionate impact of MET?

I believe the board is correct in what they're saying. However EQT will do whatever they can to get out of this, so no I wouldn't put money on it!

Disc: sold all my holding at 692. There may be other T&C's that could impact this deal.

[trader_jackson]

MET and OCA are now trading at about the same discount to their NTA (being a share price that is about 57% of their NTA - crazy to think OCA was trading much, much lower than this only a few days ago when at one point it was less than 38% of its NTA! - that is far lower than MET has ever been)

I know which one I'd rather be buying and its not MET.

[Beagle]

My understanding is that if it is reasonable to believe that profit would be impacted by 10% or more in any year, (so we are talking about not just the current year) but also next financial year that constitutes a material adverse change.

Obviously a cessation of their development program for a material amount of time in the current year is going to have material effect on the number of settlements they can achieve in FY21 and I reiterate that I think this deal is over.

What is fair value for an underperforming company with very average management in the current environment ?
To answer that we need to look at the low point last year of ~ $4.20 before Covid 19 and then extrapolate down from there based on the average decline in other listed operators in this sector.

I think its a long way south of $4.20 and if better managed OCA is trading at about 60% of NTA, maybe half NTA is fair for MET ? $3.50 is my assessment of fair value.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12320007

[Bjauck]

You guys need to refer back to the SIA. Material Adverse Changes are:

1. NTA drop by >$100m
2. NPAt drop by >10% of forecast

Most notably these cannot be because of "changes in general economic conditions, the publicly traded securitiesmarket in general or law" provided that "such matter does not have a materiallydisproportionate effect on the Target Group".

So the first question is will NTA or NPAT drop to trigger it? If yes, has the general economic conditions had a disproportionate impact of MET?
...
First whiff of a cross-infection of a resident by an employee, will they be triggering the ejector seat?

[Beagle]

Material Adverse Change means any matter, event, condition or change in circumstances or thing which occurs or is announced, and which is not an Excluded Event, (each a Specified Event) and which individually, or when aggregated with all other Specified Events, reduces or is reasonably likely to reduce:
(a) the consolidated net tangible assets of the Target Group taken as a whole by at least NZ$100 million; or
(b) the consolidated underlying net profit (including non-recurring items and calculated using the same accounting policies and methodologies of the Target Group in place as at the date of this agreement) of the Target Group in any financial year (in the FY20F year, being as set out on page 49 of the management presentation dated 4 December 2019) by 10% or more against what it would reasonable have been expected to be but for the Specified Event(s);
provided that such event, condition, matter, or change in circumstance is not the result of:
(c) a matter, event, condition or change in circumstance, to the extent that it was fairly disclosed to Bidder in the Due Diligence Materials or by Target through the NZX market announcements platform two Business Days before the date of this Agreement;
(d) done or not done at the written request or with the written approval of Bidder;
(e) resulting from the actual or anticipated change of control of Target contemplated by the Transaction;
(f) resulting from changes in general economic conditions, the publicly traded securities market in general or law; and
(g) resulting from changes in generally accepted accounting policies or the judicial interpretation of them,
provided however, that with respect to clause (f), such matter does not have a materially disproportionate effect on the Target Group;

Because I am already bored out of my mind I will play commercial lawyer, (like playing charades only more fun).
Reasonably likely circumstances taken as a whole to reduce underlying profit in any year, (I read that to include forward projections for FY21 year and or the FY20 year), by 10% or more.
Taken as a whole in terms of impact on FY21 would include considerations on
a) How real estate values might soften in the foreseeable future
b) How the slow down in development activity presently being experienced might impact sales of new completed units in FY21
c) How the general effect of the virus and its effect on the villages might make people less inclined to buy a new or existing unit in MET which might reduce their new and used unit sales in FY21.

The term reasonably likely and the quantum of 10% are not high bars. I think any reasonable person would think its reasonably likely there would be a material impact on FY20 and FY21 profitability and therefore I think its highly likely this is all over.

Now...the question is, these institutions who have been positioning themselves for either an arbitrage play or in the hope of a better offer, what are they going to do if and when this deal is formally cancelled ? How many will ride it out or cut their losses and run ?

Share price is already in the toilet, how much lower will it go ? That's the $64,000 question ?

[winner69]

Because I am already bored out of my mind I will play commercial lawyer, (like playing charades only more fun).

But the ‘jury’ seems to have made their mind up.....share price close to half of offer price

[Beagle]

But the ‘jury’ seems to have made their mind up.....share price close to half of offer price

11 of the 12 members have...before I gave the closing argument ...probably just like in a criminal trial eh :)

[JohnnyTheHorse]

But is this resulting from changes in general economic conditions Beagle? That's where things get murky.

[Beagle]

But is this resulting from changes in general economic conditions Beagle? That's where things get murky.


Hmmm...you have a good point. I'd better stick to my day job (A beagle would look stupid in one of those high court wigs anyway lol)
That's about as clear as a hot Rotorua mud pool :)

Looks like the jury has already made up its mind though.

[Bjauck]

But is this resulting from changes in general economic conditions Beagle? That's where things get murky.

Perhaps they could argue that an epidemic is not an economic matter but is actually a health matter, which has an impact on NTA and NPAT greater than 10%. That would enable them to trigger the escape clause. For example a a sudden rise in infections in MET facilities could see far fewer sales and Profit levels decline by more than 10%. It would be irrelevant if SUM and RYM also faced the same decline as the issue is primarily a health matter, and not an economic one.

The government's response to the epidemic may also have an impact on general economic conditions and profitability exceeding 10%. But that in itself would not enable them to trigger their escape clause.

[peat]

Perhaps they could argue that an epidemic is not an economic matter but is actually a health matter, which has an impact on NTA and NPAT greater than 10%. That would enable them to trigger the escape clause. For example a a sudden rise in infections in MET facilities could see far fewer sales and Profit levels decline by more than 10%. It would be irrelevant if SUM and RYM also faced the same decline as the issue is primarily a health matter, and not an economic one.

The government's response to the epidemic may also have an impact on general economic conditions and profitability exceeding 10%. But that in itself would not enable them to trigger their escape clause.

yeh exactly, proximate cause - the event- is the Pandemic, not the general economic conditions which are a result of the pandemic, and that allows them to claim the 10% lower profit figure which will easily occur
I don't think they need a cluster of infections either as you imply
So they can trigger the MAC

[troyvdh]

I really feel for MET holders..what a ride.

[peat]

I really feel for MET holders..what a ride.

funny how there was such a big discussion about whether to hang on for those last 12 cents … absolutely trivial in the end, and ended up being such a stinger.

[trader_jackson]

I feel really bad for the MET shareholders who were (in effect) being told on here by sum "it was obvious it was undervalued and of course would be subject to a takeover offer imminently", and even suggest an offer higher than $7 is quite possible... just shows, buying undervalued companies because they "are cheap", without actually considering their fundamentals (as to why they might be consistently cheap for years and years) and purely relying/claiming it will be taken over (and that "its obvious" a big premium, big money will be made) is a very risky game - not a one way street to making money.

While I expect the rest (except maybe SUM) to recover nicely over the coming year, I don't think MET will to the same extent given that prior to the takeover offer it was in the mid to low $4's... so really, totally ignoring takeover speculation, MET is currently only down about 10% from where it was August last year.. all the other operators are down substantially more than 10%.

[Balance]

Everyone had the option to sell out at close to the offer price of $7.00 - their choice to hang on for the last 10 cents.

No need for anyone to serve up crocodile tears for those who chose to hang on for a higher offer or for the last 10 cents.

The big boys building up their arbitrage stake in search of a higher offer or as simply a better than fixed interest play - cry for them if you are genuinely tearing up.

[moimoi]

Some even said the offer was too cheap and undervalued the company. :confused:

[Beagle]

The only constant in life is change howver I have never seen change on this scale in this sector in my lifetime, nothing anything like this.
OCA for example at the start of this year hit an intra day high of $1.38. At their intraday low last week they were just 38 cents. Please put your hand up if you have ever seen anything like that. If you're not really quick and adaptable to radically changing circumstances you'll get run over, its as simple as that.

The world is a radically different place today than it was at the start of the year. Material change in circumstances is an absolute given and some QC lawyers on many times this suburban bean counters pay rate will presently be combing through heaps of case history on this to build their escape clause case.

Its all over. Fair value ? Take $4.20 in 2019, less the average decline in this sector since MET was $4.20...I have yet to crunch the numbers but it wouldn't surprise me if it was under $3. The fact that they have the lowest gearing in this sector might save them from the indignity of a 2 handle on the share price.

Independent appraisal report as supposed to be in shareholders hands by late March but there's no sign of that so that's another indicator this takeover is dead in the water.

[peat]

The only constant in life is change howver I have never seen change on this scale in this sector in my lifetime, nothing anything like this.
OCA for example at the start of this year hit an intra day high of $1.38. At their intraday low last week they were just 38 cents. Please put your hand up if you have ever seen anything like that.

The world is a radically different place today than it was at the start of the year. Material change in circumstances is an absolute given and some QC lawyers on many times this suburban bean counters pay rate will presently be combing through heaps of case history on this to build their escape clause case.



I've seen it , on the green screens at the brokers office where I worked in '87. Chase Corp was $9 and went to zero. I cant remember how quickly exactly but there were movements of dollars per day. Next day nearly everyone was sacked lol (well not lol at the time).

Yeh I should've held my short on this one its always a weakness of mine to take profits too quickly. But I am pleased it was my idea coz it was a good one and I kept everyone up to date with my thinking so anyone could've jumped aboard the train if they had the mechanism set up.

Its would appear to be very disingenuous of the directors to maintain s/h's hopes that this SIA will complete. Even if the Offeror is still nodding quietly at this point , they wont pay up, and it would be a hard job to enforce. Anything is possible tho which leaves a healthy arbitrage if you think it will!

[dreamcatcher]

I've seen it , on the green screens at the brokers office where I worked in '87. Chase Corp was $9 and went to zero. I cant remember how quickly exactly but there were movements of dollars per day. Next day nearly everyone was sacked lol (well not lol at the time).

Not surprised Chase Corp went from $9 to zero, was told company was set up on $100 with assets been an office and a phone.

Heaps of others were the same amazing times .........

[Scrunch]

The only constant in life is change howver I have never seen change on this scale in this sector in my lifetime, nothing anything like this.
OCA for example at the start of this year hit an intra day high of $1.38. At their intraday low last week they were just 38 cents. Please put your hand up if you have ever seen anything like that. If you're not really quick and adaptable to radically changing circumstances you'll get run over, its as simple as that.

The world is a radically different place today than it was at the start of the year. Material change in circumstances is an absolute given and some QC lawyers on many times this suburban bean counters pay rate will presently be combing through heaps of case history on this to build their escape clause case.

Its all over. Fair value ? Take $4.20 in 2019, less the average decline in this sector since MET was $4.20...I have yet to crunch the numbers but it wouldn't surprise me if it was under $3. The fact that they have the lowest gearing in this sector might save them from the indignity of a 2 handle on the share price.

Independent appraisal report as supposed to be in shareholders hands by late March but there's no sign of that so that's another indicator this takeover is dead in the water.

I'm also of the opinion a takeover at $7 is completely dead in the water. The Unknown question is whether APGV are going to walk away or haggle on price. They have clearly invested heaps to get to this point so they may decide to haggle. A revised offer of say $5.50 remains a possibility but I don't think the MET board would endorse an offer at that price (even if it may have shareholder support - think STU). Given all the other cheap investment opportunities that have opened up world wide, my guess they will simply walk away. This smaller likelihood of haggling over the takeover price is whats keeping the share price up.


Over the January to early March period there were a heap of shares traded. Many of them are likely have landed up in the hands of funds that will have no interest in MET if its neither a takeover play or a bond-proxy. I'd guess most will look to bail out, take the loss on the chin and move to the next opportunity. What's that going to do to the share price, particularly in the current market where taking of 10, 20 and 30% of value is normal?

[Scrunch]

Disc still not holding - briefly considered buying some this afternoon but I think there's going to be more pressure on the share price as existing purchasers of a takeover situation bail out.

[Lola]

I think Kim hit the jackpot with Waste Management but sorry lightening won’t strike twice.

[dreamcatcher]

Am I correct in thinking Morgan Stanley is shorting MET...........

https://www.nzx.com/announcements/350682

[Balance]

Am I correct in thinking Morgan Stanley is shorting MET...........

https://www.nzx.com/announcements/350682

Yup - there's some of that in that jumble of deals.

[Balance]

Disc still not holding - briefly considered buying some this afternoon but I think there's going to be more pressure on the share price as existing purchasers of a takeover situation bail out.

Looks like it :

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350938/319954.pdf

2.3m sold and still, 29.77m potential shares to go with UBS.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350908/319918.pdf

Mitsubishi UFJ - 9.89m shares to go.

One of those arbitrage deals gone wrong but they are big boys and in the backwash of stocks out there taking 40% to 75% hammering, will get lost in the rounding differences.

[peat]

Looks like it :

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350938/319954.pdf

2.3m sold and still, 29.77m potential shares to go with UBS.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350908/319918.pdf

Mitsubishi UFJ - 9.89m shares to go.

One of those arbitrage deals gone wrong but they are big boys and in the backwash of stocks out there taking 40% to 75% hammering, will get lost in the rounding differences.

I dunno, surely losing a few dollars a share on a few million shares sucks bigtime in most peoples language.

[Balance]

I dunno, surely losing a few dollars a share on a few million shares sucks bigtime in most peoples language.

Not their money - and these fund managers look after tens of billions of dollars.

[moimoi]

Looks like it :

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350938/319954.pdf

2.3m sold and still, 29.77m potential shares to go with UBS.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/350908/319918.pdf

Mitsubishi UFJ - 9.89m shares to go.

One of those arbitrage deals gone wrong but they are big boys and in the backwash of stocks out there taking 40% to 75% hammering, will get lost in the rounding differences.

They might hold on to a few for when the suspended company share buyback gets started.. :D :D

[trader_jackson]

https://www.afr.com/street-talk/deal-off-eqt-infrastructure-pulls-1-46b-aged-care-takeover-20200407-p54hq5

The takeover is officially off folks.
Metlife a bit naughty they tried to claim it 'has to go ahead' all this time.

"The MAC clause allowed EQT to walk away from the transaction without incurring any break fees."

[winner69]

https://www.afr.com/street-talk/deal-off-eqt-infrastructure-pulls-1-46b-aged-care-takeover-20200407-p54hq5

The takeover is officially off folks.
Metlife a bit naughty they tried to claim it 'has to go ahead' all this time.

"The MAC clause allowed EQT to walk away from the transaction without incurring any break fees."

Was fun while it lasted ...and pretty rewarding

[winner69]

Hope they put something out to the market in next hour

[BlackPeter]

Was fun while it lasted ...and pretty rewarding

As always in life ... timing is everything :);

[BlackPeter]

As always in life ... timing is everything :);

... and hey, there might be some cheap MET shares coming up over the next couple of weeks, particularly when the next general down leg starts to accelerate ...

[Bjauck]

https://www.afr.com/street-talk/deal-off-eqt-infrastructure-pulls-1-46b-aged-care-takeover-20200407-p54hq5

The takeover is officially off folks.
Metlife a bit naughty they tried to claim it 'has to go ahead' all this time.

"The MAC clause allowed EQT to walk away from the transaction without incurring any break fees."
MET should have said nothing or admitted that the pandemic introduced uncertainty. Smaller investors would have been more reliant on their public announcements than the professional institutions. Shame on MET directors. Congratulations to them on scaring away more individuals from NZ listed companies.

Perhaps NZ Mom and POPs need to stick to investor housing especially since CGT was taken off the table?

[Balance]

Was fun while it lasted ...and pretty rewarding

Hardly a surprise, is it - sp has been telling that the deal was off a while ago.

Ready for a second dip?

SP has been trending higher as the arbitrage boys’ liquidation of stock levels off.

[winner69]

As always in life ... timing is everything :);

...remember the days of getting such a great company for less than NTA was a steal

[winner69]

... and hey, there might be some cheap MET shares coming up over the next couple of weeks, particularly when the next general down leg starts to accelerate ...

I think beagle will be in boots and all for a second bite of the cherry.

[trader_jackson]

I think beagle will be in boots and all for a second bite of the cherry.

It was often mentioned how obvious it was that it would be taken over at well above where it was trading (and a takeover was to happen at at least NTA - although at the time I remember pointing out that a recent take over of a listed Australian retirement operator was done at about a 30% discount to NTA)... but no worries, MET really must be a bargain, and about to be even more of a bargain at 10am this morning... no doubt another take over offer for this obvious takeover candidate is right around the corner.

The virus has provided the EQT with an excellent excuse to walk away from MET... the fact they didn't even try or even suggest they would consider a lower offer, say $5, shows they really did not want to touch MET in the end... and that it really is a dog all along.

[Bjauck]

JP Morgan had been dumping shares recently. Maybe they were dumping them onto hapless individual investors who believed the reassurances from the MET board announcements.

[Balance]

JP Morgan had been dumping shares recently. Maybe they were dumping them onto hapless individual investors who believed the reassurances from the MET board announcements.

Game for the big boys - short coverings very evident in the last few days and probably more to come today.

[Balance]

https://www.afr.com/street-talk/deal-off-eqt-infrastructure-pulls-1-46b-aged-care-takeover-20200407-p54hq5

The takeover is officially off folks.
Metlife a bit naughty they tried to claim it 'has to go ahead' all this time.

"The MAC clause allowed EQT to walk away from the transaction without incurring any break fees."

https://www.nzx.com/announcements/351464

"Metlifecare is taking legal advice on the APVG correspondence, but its initial view is that the assertions are without substance and that APVG does not have a lawful basis to terminate the SIA."

What else can the directors say?

[JohnnyTheHorse]

I believe any assertion that the directors are misleading investors is incorrect. They will be working on the basis that the MAC being claimed is "resulting from changes in general economic conditions, the publicly traded securities market in general or law." If this is correct, APVG cannot terminate the offer.

This will play out in the courts.

[winner69]

Wonder what this actually means ..doesn’t sound too friendly


APVG has also asserted that Metlifecare has not provided some information to APVG and made decisions in relation to its response to Level 4 Government directives without consultation and/or consent of APVG, contrary to clauses 9.2 and 9.3 of the SIA.

[moimoi]

Wonder what this actually means ..doesn’t sound too friendly


APVG has also asserted that Metlifecare has not provided some information to APVG and made decisions in relation to its response to Level 4 Government directives without consultation and/or consent of APVG, contrary to clauses 9.2 and 9.3 of the SIA.

Reads as if APVG is scratching around trying to find anything under the sun to get out...

[Bjauck]

Game for the big boys - short coverings very evident in the last few days and probably more to come today. So the net effect of their shorting activities has not resulted in their reducing their shareholding?

[Beagle]

"and/or that it is reasonably likely to reduce the consolidated underlying net profit (as described in the MAC clause) of Metlifecare by at least 10% in FY20, and/or FY21 and/or FY22 against what it would reasonably have been expected to be but for the COVID-19 event".

As expected. Most economists have predicted a material effect on the real estate market so I think its game over. Also the lockdown has seriously affected their property development activities so there will be less completed units to sell in FY21.

Game, set and match, its all over.

So...when the directors scrape themselves off the floor, (which with their track record will take them most of the remainder of 2020), where too next ? Slowdown in development to reflect slowdown in demand ? Gearing is the lowest in the sector so that's good. Instigation of the buy-back again at some stage down the track ? What's the point of building new units at 20% development margin when you can buy back your own shares at half price ?
What about all those arbitrage players who are holding heaps of shares ?

[JohnnyTheHorse]

Reads as if APVG is scratching around trying to find anything under the sun to get out...

Exactly. They know their claim on the MAC clause is far from solid.

Disc: no current holding. May look to enter at the right risk/reward price (much lower than now)

[Balance]

So the net effect of their shorting activities has not resulted in their reducing their shareholding?

Some institutions were borrowing their stock (my understanding) to short as well - so yes, too big a position to try and bail out without taking a huge haircut.

[Bjauck]

I believe any assertion that the directors are misleading investors is incorrect. They will be working on the basis that the MAC being claimed is "resulting from changes in general economic conditions, the publicly traded securities market in general or law." If this is correct, APVG cannot terminate the offer.

This will play out in the courts. I think there were doubts that an health epidemic affecting the elderly disproportionately such as we are experiencing could simply be put down to "general economic circumstances" These doubts should have been included that in theirMarch public update announcement on the scheme implementation.

[stoploss]

50 % discount wow

[King1212]

Holly ****...how many people got suck in? God all mighty 🙏!

[carrom74]

we live in a strange world...Before the takeover MET had a sp of around $4.5 and the whole world was saying that the sp is undervalued and the board even commenced a share buy back for about $30M(if i am right)...

Fast forward 8 months the sp is tanked at $3.40...seriously???

[huxley]

we live in a strange world...Before the takeover MET had a sp of around $4.5 and the whole world was saying that the sp is undervalued and the board even commenced a share buy back for about $30M(if i am right)...

Fast forward 8 months the sp is tanked at $3.40...seriously???

Pandemic party

[dobby41]

we live in a strange world...Before the takeover MET had a sp of around $4.5 and the whole world was saying that the sp is undervalued and the board even commenced a share buy back for about $30M(if i am right)...

Fast forward 8 months the sp is tanked at $3.40...seriously???

You think that's to high still?

[Cyclical]

You think that's to high still?

I don't know but OCA is suddenly looking expensive...

[dabsman]

I am buying a few. Bought back what I sold a $6.90 anyway :)

[BlackPeter]

I don't know but OCA is suddenly looking expensive...

You need to compare that with OCA at 40 cents or so. Special's don't all come at the same day :);

[King1212]

Me too...$3.30....better than any other retirement sector....

[Scrunch]

... no doubt another take over offer for this obvious takeover candidate is right around the corner.

That will depend on what international financial and investment markets look like. My recollection is that takeover activity normally builds during the economic cycle and decreases during recessions. If so, an alternative takeover is less likely... but still possible.

A lot of companies are raising big amounts of equity so this is going to gobble up a lot of cash that is looking for an investment market home. There's also a lot of companies now trading at a lot lower price than previously, so the candidate pool of companies with knocked-down share prices is a lot larger.

I think if you are buying this one at present, its because you think it gives good value for money exposure to the retirement sector, not because there's a potential takeover around the corner to save your bacon.

[Cyclical]

You need to compare that with OCA at 40 cents or so. Special's don't all come at the same day :);

Well, if you're comparing NTA's then the equal of OCA@40 would be MET@<280 :scared:

[BlackPeter]

Well, if you're comparing NTA's then the equal of OCA@40 would be MET@<280 :scared:

Well, in this case we better wait still a bit before we back down the truck :):

[Cyclical]

Well, in this case we better wait still a bit before we back down the truck :):

Looking at the number of people trying to back out at 330 and the relative lack of depth, I wouldn't be too surprised to see it at sub 3 bucks today.