MET - Metlifecare - one for the fundies?

[nztx]

A Very Good analysis there - Beagle

[clip]

Reasonable yes, although I do doubt it given that the IC will most likely be 70+ of age due to entry requirements, and this demographic tends to be classed as 'vulnerable people' given that many have complicated medical histories or compromised immune systems. From memory, even at old level 2 and 3 alert levels vulnerable people were instructed to stay at home. I think it's unlikely for that to change. Maybe a possibility through video calling and viewing through a virtual tour?

I work in real estate industry (technology manager for a real estate company) and we are putting together systems in place for tenants to view properties and for listings etc. Pretty much exactly video calling and virtual tours, so yes that could and should be used for showing properties in retirement villages

[Beagle]

Great post there Beagle ..but you didn’t answer by question (important one from a risk perspective)

What’s the trigger for you to fall out of love with MET and kick them out of the kennel

I'm comfortable long term, (not expecting great things this year for obvious reasons). I really like the sector, the business model of all the operators is extremely tax efficient, and the demographic trends are undeniable.

I never wanted to sell SUM but the board never took on board my insistence over many years they needed to move to a fixed weekly fees for life model, in line with the rest of the sector and over the years they simply haven't been able to sell the units they've built. In my opinion the board have made a very poor call on this matter and its really hurting the company. I have also come to have real doubts about Julian's ability to work with Councils and key stakeholders to get developments done in a timely manner. The no growth thing when the company was priced for strong ongoing growth went down with the market like a lead balloon and was the trigger to find a better opportunity in this sector elsewhere.

I really do have a very strong desire to have really meaningful exposure to this sector long term and this provides the best opportunity (by a very long way), at current pricing. I would be happy to buy ARV if it gets down to NTA-V. Other than that I can't tell you what future trigger may impact my investment decisions because...well, that's in the future. I don't think the share price is going to rise back to NTA of $7 anytime soon and I'm quite comfortable with that.

An investment of 100,000 shares in MET is ostensibly the same as buying a nice retirement unit worth $700,000, for just $405,000. Covid 19 almost beaten here or not quite yet, that's a deal that's simply too good not to accept. Thing is, I have calculated 100,000 shares actually (with the interest free resident loans), gives you all the future benefit with resident and other gearing, (over 58% gearing the vast majority of which is free resident loans) of all future tax free capital gains from ~ $1.7m worth of property.. and that's the hidden gem of this retirement sector right there and that's why I like this sector and the business model.

Finally, this extract from MET announcement of 20 March 2020 should be noted

Metlifecare has not observed any material impact on its retirement village unit sales or admissions to residential aged care homes to date and does not expect the pandemic to have a disproportionate effect on Metlifecare.

[winner69]

Hey Winner me ol mate, you reckon $1 a week is a good deal for a trail 4 subscription to get access behind the paywall :p (Sorry mate, I couldn't resist)


They keep sending me emails to one address I have pleading for money ....even more pleads I get from Jacinda

Please, we need your support. Please please etc

Must be going broke or something ...probably Mike’s fault

Beagle - you probably enjoy Mike’s pieces?

[allfromacell]

This is very odd. Surely trading at 50% of net tangible property assets cannot go on forever??!!

Who are NZ Retirement Villages? Why would they be content with management and directors that deliver destruction of shareholder value while praising themselves for their "excellent performance against a challenging back drop"

!! ??

Meanwhile Ryman trades at 200% net tangible property assets and humbly credits their performance due to good service and consistent and simple operating model.

Will be interesting to wee outcome of the strategic review. Hopefully some improvement in liquidity and possibly some value will start to be realised....

:confused:

This is a post from the first page of this thread in 2011. Perhaps trading at a significant discount to NTA can go on for another 10 years?

[Beagle]

Yeah, was $2 a share, (about half NTA) and very shortly thereafter there was an attempted takeover at $3.90...history never repeats, or does it ?
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10761913

[Raz]

Hey Beagle me old mate. We all know you are a trader (won’t use the word punter) and not an investor per se.

We all know that you fall head over heels in love with a company but you tend to fall out of love very quickly and kick them out of your kennel.

So a question

With MET what is the trigger that causes them not to be ‘deep value’ any more and you give them the boot.



Disc: taking a punt essentially because the share price sunk really low and there’s still a chance the takeover might happen or another offer might be made ...but I have no faith whatsoever in the current Board and management extracting any ‘great value’ out of this dog

Ha who needs enemies with friends like that alright! A punt is all there is to go for really when you have so much time on your hands and everything else has moved on up, say go for AIR with no practical operation on the up swing or could invest in a SME and have you hands full...then that is a losing play here in NZ with illusionary Government support...its okay if you are offered a Trump grant, direct cash.. however that is USA not here... so take a punt on MET is just as constructive...

[Scrunch]

This is a post from the first page of this thread in 2011. Perhaps trading at a significant discount to NTA can go on for another 10 years?

Discounts to NTA can exist for very long periods (as can premiums's to NTA). For example MCK has has maintained a decent sized discount to NTA across 2012 to 2019 and probably before this as well.

If you go back a little bit further than Beagle has in his good-growth statistics, MET growth metrics start looking a bit shaky. MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). So from a long-term perspective its been well deserving of its dog reputation.

Unlike SUM/RYM, MET never made it to new high's following the GFC (The June 2007 share price was $8.25).

The really key question is, Is today's version of MET (including its management team) better/different to the version that destroyed value and existed 10 years ago. Beagle has given some reasons to consider. Are they strong enough to revalue the company to near NTA? The jury is out on that one.

Disc - was a holder and sold out a few months ago. Didn't rebuy quickly in the low $3's as I thought the takeover speculators bailing out would push the price even lower.

[winner69]

If you go back a little bit further than Beagle has in his good-growth statistics, MET growth metrics start looking a bit shaky. MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). [/B]So from a long-term perspective its been well deserving of its dog reputation.[/B]

Now now Scrunch ...that’s in the past :t_up::t_down::eek2:;):p



....but dogs like tigers don’t change

[nztx]

How many other potential interested suitors were there for MET again ?

Arguably, I dont see too much of the value in MET has disappeared during C-19 either

[Bjauck]

I reside in one of their villages.No one has been tested at our village [no one leaves the village except for doctor appointments & staff do all the shopping]We have a team of nurses 24 hours a day,they phone every resident twice a week to see if they are fine,besides looking after any resident with any ailment.They do not use any masks etc & so far no problems.One of MET villages had a case [the person had been overseas] & all residents & staff were tested at that village & were negative according to our CEO Mr Sowry [who sends us regular updates on everything to do with Covid19 & any govt announcements].Just as a matter of interest all residents were given the current FLU vaccine just over 2 weeks ago,so they should now be active in us.Hope that helps you,good luck with investments.

Thanks for the update. Underlines for me the fact that retirement villages are the best place for oldies to be at the moment. Most of my elderly relatives still reside independently in their own homes. I feel they would be in a more secure and safer environment in a retirement village.

Disc: own shares in four retirement companies.

[Beagle]

I've been counting beans for much longer than I'd like to admitt BUT one thing I have learned is that the best guide to the future is the most recent past, in this case the fact that there were 3 parties interested in taking this over, and FY19 performance of $90.5m underlying profit or 42.4 cps (historic underlying PE is just 9.5). The second best guide is the 3 or 4 years before that, which is why I usually look at a five year history. The third best guide, (note the order here which really does make me a hardened cynic about all management statements), is what the company tells you about its current trading and outlook. The forth best guide is what detailed analysis of the first three guides tells someone doing good analysis about the company. Looking back further than 5 years often with different management, a different balance sheet and / or completely different market dynamics is a very poor fifth best guide to the future in my opinion, so poor I often don't bother.

In addition to the 3 potential suitors there's the companies own buy-back program to consider as well which could quite conceivably get a major increase in its scope if the share price lingers around this level.

When I look at the other 4 listed operators in this sector, none presents as fair value to me considering the new normal we're likely to be in.
I won't pay over the odds for any company in this new normal, I care nothing for reputations and stick to the hard numbers, underlying average eps growth of 15% per annum for the last five years and on a PE of just 9.5 and one is buying at 42% discount to NTA does it for me.

Oh, by the way, I haven't noticed multiple other companies trying to take over any of the other listed retirement companies...maybe this dog's way of valuing companies does have a factual basis after all...

[nztx]

Agree with you Beagle

There aren't an excessively huge number of shares issued either @ 213 Mil

the recent Takeover Arbitrage Holders departing probably opens things up for the other interested parties

[pierre]

Oh, by the way, I haven't noticed multiple other companies trying to take over any of the other listed retirement companies...maybe this dog's way of valuing companies does have a factual basis after all...

Appreciate your analysis Beagle.
Can I ask, if you had $100k invested in OCA that's currently underwater, and you wanted to remain invested in the sector, how much of it would you move into MET? Asking for a friend.

Discl. Also own RYM and SUM.

[allfromacell]

The last time there was a slump in the property market prices weren't greatly effected however volumes dipped quite a lot. MET mention in the late 2000's annual reports they experienced sales slumps due to retirees needing to sell their homes before making the move into a village and when they struggled they gave up and opted to wait for recovery and delay the move instead of meeting the market. This saw a drop off in sales and I suspect the same thing will likely occur this time too. This is obviously going to effect all companies in this sector however OCA being more care focused means their sales are more needs based + revenues are also more care focused which in my view makes them a good hold going into the upcoming property slump.

I loaded up to the gills in OCA shares during the recent crash with an average buy price of $0.52 and have since sold a lot in the mid $0.80s to get into MET because even though I believe they will struggle to sell as many units going forward, their gearing is low, the NTA discount is high and takeover opportunity remains. The ratio I've chosen is around 50:50 and plan to hold the shares for many years.

[King1212]

Wow...100k in OCA.....what a brave investment..it should be divided by 10 companies....

[stoploss]

Wow...100k in OCA.....what a brave investment..it should be divided by 10 companies....
King you can’t make that statement , maybe he has a portfolio worth $10 mio so it’s small change.Without all the info you are not commenting in an informed manner .

[King1212]

Even $10m....I won't put all in the share market.....gosh... people think share market is a good place to play around.

[Balance]

MET had a NTA of $6.93 as at June 2007. Its NTA is still around this level so the compounded growth from peak to peak is about zero percent (but there has also been a some dividends creating a positive return). So from a long-term perspective its been well deserving of its dog reputation.


You need to compare like for like - MET today has a different capital structure than the MET which went into the GFC.

There were placements of shares & SPP which raised:

- $43.8m at $2.10 in 2011 - 20.9m shares

- $80m at $3.10 in 2013 - 25.8m shares

Then there was the merger with PLC & VSL in 2012 - $202m issued at $5.09 - 39.7m shares

Adjusting the NTA for the above = $5.62 per share.

Leave the ROI or ROE calculations to one of you mathematical genuises here - I barely passed my Maths in Uni. :p




-

[Beagle]

Appreciate your analysis Beagle.
Can I ask, if you had $100k invested in OCA that's currently underwater, and you wanted to remain invested in the sector, how much of it would you move into MET? Asking for a friend.

Discl. Also own RYM and SUM.


Without all the info you are not commenting in an informed manner .

I don't want to give specific advice either for a number of reasons (including lack of a total picture), but its clear from my comments on here I think MET is very very cheap, OCA around about fair value at present, ARV is a good company but doesn't deserve a premium to NTA, SUM really has lost its way and RYM is heinously overpriced and trading on a reputation, (one that doesn't warrant the current price by any stretch of the imagination).

I guess a lot depends on whether an investor wants to chase out-performance in the sector like I am or whether they're happy with a market performance. In the latter case, deciding how much of your portfolio you want in this sector and then splitting it 5 ways in equal measure makes good common sense.

If one is chasing outperformance in the sector and is completely comfortable with the extra risk of a non diversified portfolio then I think having all one's retirement sector investment in MET is where the takeover action could be and very deep value, most definitely is. I am also happy long term as MET's growth rate outlook is not materially different to any other company in this sector, other than SUM who look like they are going to really struggle for at least the next 2 years.

[troyvdh]

Sorry...can folk google depression what it means.re being shoved a dead bears bum...excellent.

[pierre]

"If one is chasing outperformance in the sector and is completely comfortable with the extra risk of a non diversified portfolio then I think having all one's retirement sector investment in MET is where the takeover action could be"

Thanks for your reply Beagle. Your comment aligns with my thinking. I held MET earlier but sold at 687. Time to get back in I think.

[Balance]

"If one is chasing outperformance in the sector and is completely comfortable with the extra risk of a non diversified portfolio then I think having all one's retirement sector investment in MET is where the takeover action could be"

Thanks for your reply Beagle. Your comment aligns with my thinking. I held MET earlier but sold at 687. Time to get back in I think.

Strategy to apply to just the retirement village sector but to the stockmarket as a whole :

https://www.marketscreener.com/business-leaders/Warren-Buffett-6/news/When-Buffett-s-Phone-Stops-Ringing-WSJ--30430858/?countview=0 (thanks Kiora)

"Mr. Munger, vice chairman of Berkshire Hathaway Inc. and Warren Buffett's longtime business partner, likes to say that one of the keys to great investing results is "sitting on your ass." That means doing nothing the vast majority of the time, but buying with " aggression" when bargains abound."

MET definitely fits into the 'buy with aggression' when bargains abound.

[bull....]

"If one is chasing outperformance in the sector and is completely comfortable with the extra risk of a non diversified portfolio then I think having all one's retirement sector investment in MET is where the takeover action could be"

Thanks for your reply Beagle. Your comment aligns with my thinking. I held MET earlier but sold at 687. Time to get back in I think.

if it was such a good investment why did all the suitors run for the hills lol , maybe because they think the sectors not worth it at the moment. maybe if your real lucky they might come back one day with a lower offer than before.

[Balance]

if it was such a good investment why did all the suitors run for the hills lol , maybe because they think the sectors not worth it at the moment. maybe if your real lucky they might come back one day with a lower offer than before.

Same reason why stocks like OCA was sold down to 40c on 22 March.

[bull....]

Same reason why stocks like OCA was sold down to 40c on 22 March.

lol your implying the suitors are dumb mugs that have no brains and got scared. the trade was the bounce just like oca not the value proposition because that wont be known untill later down the track , so your risk/ reward is that if you hold

[King1212]

Here we go...bull is here...

[bull....]

Here we go...bull is here...

we need some balance lol

[Balance]

lol your implying the suitors are dumb mugs that have no brains and got scared. the trade was the bounce just like oca not the value proposition because that wont be known untill later down the track , so your risk/ reward is that if you hold

Not mugs - in their boat, I will do the same - reset my bid at a lower price.

Thing is, bull - you have zero chance of getting back into MET at lower than the price you sold out a few days ago. Good try but market has woken up to the opportunity to invest in a heavily discounted stock - thanks to the arb funds HAVING to sell out.

[King1212]

I agree bull...but your posts are based because you sold position ...

[bull....]

I agree bull...but your posts are based because you sold position ...

no intention of buying again , good luck

[Balance]

no intention of buying again , good luck


glad i sold this morning might tank tomorrow

Stay clear and stay safe, bull. :p

[pierre]

no intention of buying again , good luck
Covid-19 is going to cause many consequential changes in our country. However, what won't change is the onset of the grey tsunami or the ongoing need for aged residential care and accommodation. There may be a temporary lull in people making the decision to move into retirement facilities, but that won't last long as health, safety and security concerns override other factors.
Investing in the sector is a rational decision, the only question to ask is: Is now the right time? In the case of MET, I think it is.

[dobby41]

Covid-19 is going to cause many consequential changes in our country. However, what won't change is the onset of the grey tsunami or the ongoing need for aged residential care and accommodation. There may be a temporary lull in people making the decision to move into retirement facilities, but that won't last long as health, safety and security concerns override other factors.
Investing in the sector is a rational decision, the only question to ask is: Is now the right time? In the case of MET, I think it is.

Rational and reasonable.
Rare around here at the moment.

[traineeinvestor]

Covid-19 is going to cause many consequential changes in our country. However, what won't change is the onset of the grey tsunami or the ongoing need for aged residential care and accommodation. There may be a temporary lull in people making the decision to move into retirement facilities, but that won't last long as health, safety and security concerns override other factors.
Investing in the sector is a rational decision, the only question to ask is: Is now the right time? In the case of MET, I think it is.

Agree with all of this and recently bought back in to MET for these and the reasons Beagle has articulated so clearly, but what I suspect will change is the ability of the "grey tsunami" to pay if the value of their existing houses and other assets being sold to buy into a retirement home fall. MET will continue to do business but IMHO there is a question mark over the price they will realise. Regardless, the share price is still sufficiently far below a Covid-19 adjusted NTA for me.

[macduffy]

Agree with all of this and recently bought back in to MET for these and the reasons Beagle has articulated so clearly, but what I suspect will change is the ability of the "grey tsunami" to pay if the value of their existing houses and other assets being sold to buy into a retirement home fall. MET will continue to do business but IMHO there is a question mark over the price they will realise. Regardless, the share price is still sufficiently far below a Covid-19 adjusted NTA for me.

Rymans, and I suspect all the big players in the sector, pitch their unit prices at a percentage of property prices in the area, in RYM's case at 75%. I agree that there will probably be a lull as the market adjusts and individuals' plans are reviewed but the march of time and its effects will continue regardless.

Holding MET

[winner69]

Did any of you guys have one of these beauties to work with?

It’s an Osborne Executive portable computer launched.p in 1983

[nztx]

Did any of you guys have one of these beauties to work with?

It’s an Osborne Executive portable computer launched.p in 1983

An interesting piece of kit

Do you still have one that is working ?

What's the relevance of this piece of history to the thread .. just out of interest ?

[mp52]

It’s an Osborne Executive portable computer launched.p in 1983
Fun fact.... It was specifically designed to fit under an airliner seat... Business Class one assumes. Only "portable" I'm aware of with a CRT. But yeah...grasping for context.

[winner69]

An interesting piece of kit

Do you still have one that is working ?

What's the relevance of this piece of history to the thread .. just out of interest ?

This thread seems to have a lot of inteesting irrevalent stuff on it so my not .... any way the world is not very orderly these days so anything goes

Maybe some MET residents still have these

[nztx]

This thread seems to have a lot of inteesting irrevalent stuff on it so my not .... any way the world is not very orderly these days so anything goes

Maybe some MET residents still have these


Very good .. quite possible - winner

[King1212]

Aw yeahh...Master winner....that is an antique!....it is at Te Papa yeah aw

[dabsman]

Does anyone know what is to happen with the withheld dividend?

[nztx]

Does anyone know what is to happen with the withheld dividend?

that depends on whether MET's board feel that shareholders now deserve a double treat for their recent ordeal
or choose to withhold all or part of it in the coffers for a better rainy day or any number of curious or even more obscure reasons..

Hopefully they won't be too tardy in deciding, and get it through before another suitor hits the table with a further takeover offer

[winner69]

We’ll be back in the 6 buck range in no time

A punters dream I reckon

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MET/351880/321052.pdf

Glad MET still using Osborne portable PCs ...always rely on them to churn out the right words.

[Balance]

https://www.nzx.com/announcements/351880

Update from Metlife :

Key points

• The Metlifecare Board has received legal advice and reiterates its belief that there is no lawful basis for APVG to terminate the SIA and that the assertions made by APVG are without substance
• Specifically, the Board does not believe the triggers under the “Material Adverse Change” (MAC) clause in the SIA have been, or are reasonably likely to be, triggered
• Further, the Board has legal advice that the MAC clause does not apply, for reasons including:
- Any impact on Metlifecare has been as a direct result of the change in general economic conditions caused by the New Zealand Government’s mandated Level 4 lockdown (the lockdown) restrictions put in place on 25 March 2020;
- Restrictions that have affected the operations of Metlifecare constitute a change in law i ; and
- Any impact has not had a disproportionate effect on Metlifecare.
• The Board is in the process of appointing a QC to assist Metlifecare
• Metlifecare remains strongly committed to the successful completion of the SIA in the interests of all shareholders and remains on track to dispatch the scheme materials in late April.
• Based on recent scenario analysis, Metlifecare’s current consolidated underlying profit projection for FY20 is $83 million to $90 million

[winner69]

Did MR Beagle write that announcement?

[Cyclical]

Did MR Beagle write that announcement?

Haha, was wondering the same thing myself!

[allfromacell]

Hmm that exciting but is MET just being opportunistic or is there real grounds here? I'm no lawyer but looking forward to seeing how this opens, I imagine a lot of punters will be happy to take some profit and get out if it opens up significantly.

[peat]

sheeetfiiiiight

[Bjauck]

Hmm that exciting but is MET just being opportunistic or is there real grounds here? I'm no lawyer but looking forward to seeing how this opens, I imagine a lot of punters will be happy to take some profit and get out if it opens up significantly. The MAC clause is quite broad with lots of scope for interpretation. At least QCs and lawyers will not be short of work during level 3 lockdown!

[bull....]

going to head to court for sure , met even admitting the mac clause criteria most likely be met as well soon. so yea plenty of money to be spent on bun fighting to come

[Balance]

Hmm that exciting but is MET just being opportunistic or is there real grounds here? I'm no lawyer but looking forward to seeing how this opens, I imagine a lot of punters will be happy to take some profit and get out if it opens up significantly.

Talked to one of my contacts in one of the PE funds in Oz.

He said a lot of negotiated deals have been pulled, all citing the pandemic and its flow on impact as MAC events - however tenous the contention.

He also said however that having done all the due diligence, the buyers (his fund included) are really positioning themselves to renegotiate the deals to obtain post pre-covid 19 prices. The PE funds exist to do deals - not scuttle deals. All a question of price when they have decided on an acquisition.

I think that's where this 'dispute' is heading as it's not in anybody's interest to go to court and spend a lot of money.

So let's say, APVG proposes $5.60 (20% discount to $7) as a starting point?

[peat]

yeh the statement today makes some good points . I tend to think it is very arguable either way

It is pretty hard to be categoric about whether the property portfolio has taken a hit large enough to trigger the MAC , and the bottom line is no one can know until the valuation is done at that time stipulated. Note how the directors focus on the future cash flow oriented valuation which will be less affected than a fire sale market valuation which might be lower in these covid days.

Looking forward to seeing the new price today!

[Beagle]

Did MR Beagle write that announcement?


Haha, was wondering the same thing myself!

LOL - Some good strong barking in that announcement, that's for sure ! I like the forecast of $83-$90m underlying profit. Mid point is $86.5m which represents just a ($86.5 / $90.5m), 4.5% reduction on FY19. That's very strong in the circumstances and a very modest impact by any interpretation one cares to use.

What you're seeing here is the resiliency of their business model. They're not dependent on ongoing development for so much of their business model like SUM other companies who are likely to be considerably more affected are.

[Bjauck]

...

So let's say, APVG proposes $5.60 (20% discount to $7) as a starting point?
Given the uncertainties as to when there will be a post-covid environment & economy and how they will look, and the fact that MET has historically traded at a large discount to NTA, I would be more inclined to think that any adjusted APVG offer may be $4 something. That is, if they are not forced to complete at the current arrangement price.

I wonder how much the QC and lawyers will cost shareholders? All money down the gurgler, if directors fail in their bid to force the arrangement through.

[Beagle]

Talked to one of my contacts in one of the PE funds in Oz.

He said a lot of negotiated deals have been pulled, all citing the pandemic and its flow on impact as MAC events - however tenous the contention.

He also said however that having done all the due diligence, the buyers (his fund included) are really positioning themselves to renegotiate the deals to obtain post pre-covid 19 prices. The PE funds exist to do deals - not scuttle deals. All a question of price when they have decided on an acquisition.

I think that's where this 'dispute' is heading as it's not in anybody's interest to go to court and spend a lot of money.

So let's say, APVG proposes $5.60 (20% discount to $7) as a starting point?

Maybe they will settle this at the original proposed takeover price of $6.50. Some people reckon this is a dog but if so then I like the way its barking and showing some teeth !

[peat]

Maybe they will settle this at the original proposed takeover price of $6.50.

but its not at all unrealistic that the directors hold out for the full $7.00 given their expressed opinions and their job to act in the best of shareholders interest.

Your nose still working very well Beagle despite the lockdown.

[Balance]

yeh the statement today makes some good points . I tend to think it is very arguable either way

It is pretty hard to be categoric about whether the property portfolio has taken a hit large enough to trigger the MAC , and the bottom line is no one can know until the valuation is done at that time stipulated. Note how the directors focus on the future cash flow oriented valuation which will be less affected than a fire sale market valuation which might be lower in these covid days.

Looking forward to seeing the new price today!

$4.35 on opening.

If the arb funds hold off selling any more, we will be back at $5.00 by Friday. :t_up:

[Beagle]

but its not at all unrealistic that the directors hold out for the full $7.00 given their expressed opinions and their job to act in the best of shareholders interest.

Your nose still working very well Beagle despite the lockdown.

I agree 100% !
Thanks mate. Beagle's are insatiable in their desire for food :lol: Very pleased I loaded up twice as much as last time.

[stoploss]

$4.35 on opening.

If the arb funds hold off selling any more, we will be back at $5.00 by Friday. :t_up:

They'll be back buying :ohmy:

[Balance]

Maybe they will settle this at the original proposed takeover price of $6.50. Some people reckon this is a dog but if so then I like the way its barking and showing some teeth !

Heading towards $4.50 today? Offers look very thin while buyers are bidding up.

One of the best plays still in the market!

Undervalued, business intact and takeover prospect (with 3 potential bidders).

[winner69]

I agree 100% !
Thanks mate. Beagle's are insatiable in their desire for food :lol: Very pleased I loaded up twice as much as last time.

Well done

I got 3 times as many as before

Suppose a few did better than that so better not skite too much ...silently counting the new riches is better for the soul I reckon.

[winner69]

Heading towards $4.50 today? Offers look very thin while buyers are bidding up.

One of the best plays still in the market!

Undervalued, business intact and takeover prospect (with 3 potential bidders).

No balance ... at least $4.75 ...and $5 plus by Friday

[Balance]

No balance ... at least $4.75 ...and $5 plus by Friday

Wonder how bull... is feeling.

[44wishlists]

Wonder how bull... is feeling.

Bull maybe still sitting nicely in the RYM train, given he missed the ATM train earlier, now he missed the MET train...

[bottomfeeder]

Woohoo, its good to see a blue arrow pointing upward on the Direct Portfolio screen. And in the thousands. I managed to accumulate 10k at under $4.00. Would have liked to get more. Am however a bit worried, about the potential waste of legal fees coming up.

[Beagle]

Well done

I got 3 times as many as before

Suppose a few did better than that so better not skite too much ...silently counting the new riches is better for the soul I reckon.

You like a punt at the dog's eh mate so with the dog racetracks closed around the country this is the next best thing :D
I haven't finished buying yet but agree 100% about the last bit of your post.

[Oliver Mander]

Took some profits in my trading portfolio on this one today. Had good accumulation during the dip. Now looking for the next entry point...still think Beagle has a good point that the takeover action (from someone!) has got legs in it still...

[bull....]

Wonder how bull... is feeling.

im very well thank you. busy counting all the insane money rolling in at the moment. I will have to empty the toilet paper from the cupboard to fit in all the cash for the upcoming depression lol. just trying to un load my last bounce trade as we speak. not met

[winner69]

Chris Lee (much respected by some and hated by others) says MET blundered badly by not talking more to APVG

APVG also alleges that Metlifecare breached other terms of its agreement, including consulting it for decisions made in regards to its response to the Government lockdown.......... If this is attributable to an unwillingness to communicate by Metlifecare, then shareholders will be furious. Law suits might follow.

https://www.chrislee.co.nz/taking-stock

[bull....]

Bull maybe still sitting nicely in the RYM train, given he missed the ATM train earlier, now he missed the MET train...

im not a long terrm holder , i trade stocks like atm etc so have not missed any train . more like jumping on and off the train all the time

[Balance]

im not a long terrm holder , i trade stocks like atm etc so have not missed any train . more like jumping on and off the train all the time

Ramping up and ramping down?

[bull....]

Ramping up and ramping down?

yes thats how you leave the train isnt it? by the ramp

[Balance]

yes thats how you leave the train isnt it? by the ramp

Good one, bull...:)

[bottomfeeder]

im not a long terrm holder , i trade stocks like atm etc so have not missed any train . more like jumping on and off the train all the time

Yep, me too taxed as a trader. What method do you use to value closing stock of shares. Has it been tested by IRD

[bull....]

Yep, me too taxed as a trader. What method do you use to value closing stock of shares. Has it been tested by IRD

kpmg advised me on tax treatment to use via company. all legal done by professionals

[Raz]

Good one, bull...:)

Nice collect and go to....

[44wishlists]

yes thats how you leave the train isnt it? by the ramp

I see! Explained all.

[bottomfeeder]

kpmg advised me on tax treatment to use via company. all legal done by professionals

Not testing you, just wondering if anyone uses market value. With everything depressed as at 31 March, would give the best result.

[Balance]

No balance ... at least $4.75 ...and $5 plus by Friday

Looks like you are right!

As long as the arb funds hold off selling - and why would they sell now? The game is back on! :t_up:

[bottomfeeder]

Wow when you think about it who would want those fund managers looking after your money, selling out when it was obvious to many the SP was undervalued.

[winner69]

Underlying Profit

H120 was down 5% on pcp
H220 projected to be down 10% on pcp. (Projected based on scenarios)

Things going backwards pre virus ...and accelerating post virus.

But thankfully fundamentals mean zilch these days

Go MET ...$5 in a day or so.

[Balance]

Wow when you think about it who would want those fund managers looking after your money, selling out when it was obvious to many the SP was undervalued.

They are arb funds - their mandate is to play at the margins in takeover situations.

If a takeover offer is off, they have to sell.

[bottomfeeder]

No matter how smart you think you are you can always learn something new. Didn't know there are funds like that.

[winner69]

OMG Stuff plenty poverty and pleading for ‘contributions’

Will be end up with a state controlled Herald / Stuff merger?

[Balance]

No matter how smart you think you are you can always learn something new. Didn't know there are funds like that.

Don't worry about them not doing well - they often force acquirers to increase the offer price!

[Beagle]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12326010
"Based on recent scenario analysis, Metlifecare's current consolidated underlying profit projection for FY20 is $83m to $90m", the company said. That compares with a $90.5m underlying profit reported in the 2019 financial year. The company has not previously offered guidance for the current financial year.

[peat]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12326010


I think I paid twice for that article.
https://www.businessdesk.co.nz/article/jilted-metlifecare-digs-in-for-stoush-with-absconding-bidder

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12326010
"Based on recent scenario analysis, Metlifecare's current consolidated underlying profit projection for FY20 is $83m to $90m", the company said. That compares with a $90.5m underlying profit reported in the 2019 financial year. The company has not previously offered guidance for the current financial year.


Where’s the growth then

Suppose the past is now history ...and we reset the future

[winner69]

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12326015

Rich people are flowing to NZ...that will make our assests even higher!

From another thread but very relevant here

[King1212]

Thanks Master winner..!

[Beagle]

Where’s the growth then

Suppose the past is now history ...and we reset the future

Its about resilience for now. MET's business is very resilient because they have $1,155m in embedded value on their balance sheet. All they need to do is churn existing units to make good money. Once they get their development model pumping in the future growth will come. I am investing for growth returning in a solid way in FY22 and beyond. They have the lowest gearing in the sector too, another sign of the resilience of their business model.

Underlying profit barely affected this year because of Covid 19 is a very good forecast result and its a very refreshing change to see a company issuing fresh guidance when most are withdrawing guidance !

[Balance]

https://www.rnz.co.nz/news/business/414661/metlifecare-takeover-there-s-one-hell-of-a-court-case-coming-up

Fighting talk from MET.

Cheesed off shareholders telling the company to go for broke and sue for specific performance.

Ball is in APVG’s court to prove MAC.

[King1212]

Another stab! I think will go ahead...at $6 or $6.50

[Beagle]

https://www.rnz.co.nz/news/business/414661/metlifecare-takeover-there-s-one-hell-of-a-court-case-coming-up

Fighting talk from MET.

Cheesed off shareholders telling the company to go for broke and sue for specific performance.

Ball is in APVG’s court to prove MAC.

Good stuff. This is going to be the best corporate entertainment all year and we have front row seats purchased at dirt cheap prices :D

[macduffy]

Let's hope that the "entertainment" doesn't cost the audience too dearly!

I still reckon that the parties will see the folly in taking this too far and will renegotiate a satisfactory price at which the takeover can proceed.

Disc: Holding too many MET for comfort.

[bottomfeeder]

Must be an institution buying, the old buy and then stop for a day or so, so the SP doesnt get too far away from them, just drop back a bit. Or could be someting totally different, eager profit takers. I dont know.

[winner69]

Good stuff. This is going to be the best corporate entertainment all year and we have front row seats purchased at dirt cheap prices :D

...even more entertainment than impending train wrecks (or AIRcollapse)

[crighton100]

Hi all Have you seen the latest news about the big wigs in SUM selling down bigtime recently & old Sowry CEO MET,I dont think he has sold any...

[nztx]

...even more entertainment than impending train wrecks (or AIRcollapse)

May have to find another truck to back up for some more ...

All that extra Media exposure may see plenty of added price attention

No danger of nose dives or crash landings with this one ..

[Cyclical]

No danger of nose dives or crash landings with this one ..

Maybe not crash landings, but I'm expecting there to be plenty of volatility ahead as the war of words (and associated uncertainty) goes back and forth :)

[bottomfeeder]

Selling down in SUM, and buying MET no doubt. More upside. I see Beagle has already made this suggestion on the SUM thread. I thought of this independently though.

[traineeinvestor]

I saw a few references to dividends in some of the recent posts on this thread. If MET is taking the view that the takeover offer should still proceed then I would assume that means no dividend (at least until the matter is resolved one way or the other).

Disclosure: Held

[see weed]

I think I maybe a shareholder, but not sure, so bought another 10000 this afternoon:eek2:.

[winner69]

wonder if that projected earnings number includes the virus wage subsidy theyve got

[Beagle]

Well spotted mate $962.9K. I wonder if their forecast includes all the extra costs, maybe millions, of meeting Covid 19 requirements ? SUM other company today reckon its cost them millions extra for security guards, PPE gear and extra staff costs. Maybe that's why underlying profit forecast to be down a few million this year, that and the shutdown to construction, otherwise they would have had more growth ?

Welcome on board see weed.

[Raz]

wonder if that projected earnings number includes the virus wage subsidy theyve got

I would think so, they are a given.

[Bjauck]

Let's hope that the "entertainment" doesn't cost the audience too dearly!

I still reckon that the parties will see the folly in taking this too far and will renegotiate a satisfactory price at which the takeover can proceed.

Disc: Holding too many MET for comfort.
It depends how desperately the overseas purchaser wants the arrangement not to go ahead, given the changed environment in which the World, NZ, residential land, and care now find themselves. My guess is that given their announcement, they are quite keen to “wash their hands” of the arrangement.

When you have a former Conservative National Party PM, Bill English, berating the stock market if prices don’t fall far enough, it does seem to indicate a big shift in the NZ political environment. So for an overseas purchaser, the NZ country risk may look less benign!
https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12324053

[Beagle]

We have a new forecast today which at the mid point is $86.5m, down from $90.5m underlying last year.
We know SUM are in the media today saying the extra costs of Covid 19 run into the millions, security guards, extra PPE equipment and extra pay.

In the context of having to stop development activities and the shutdown affecting sales for 5 weeks and all the extra costs of Covid 19, I am very encouraged indeed by the resiliency of the business. I am also very encouraged by the forthright manner in which the directors are pursuing the best outcome for shareholders.

I also think the extension of lockdown 4 protocols for a few more days makes a lot of common sense. A good day all round. Happy holder.

[nztx]

Indeed. Along for the ride on this one. This will be fascinating as we watch the stoush unfold. Who knows, it may deliver a huge return in a short timeframe. Either way below $4.00 we have bought a solid investment with a huge margin of safety.

That's the way I see it as well ..

[zacman]

I have been investing on the sharemarket for over 30 years and I still don't understand it ! Overnight I had a buy order for 10,000 MET at just over $4. This morning I saw the market release and thought here comes an expensive legal stoush and so dropped my buy price to just under $4. The price of course took off, yet again proving that it's never too late to learn a thing or two.

zacman

[Cyclical]

Not wishing to rain on the parade, but aside from having an encouraging update from the company today, how are we really in a better situation than we were for the 2 weeks leading up to the 8th of April, before APVG expressed a desire pull out? The share price hovered around $3.80 for much of that period. It looks to me like we still have much of the same uncertainty attached. Big bounce this morning before retracting half of it this afternoon...is that because later in the day people realised that we're basically in the same position we were ~2 weeks ago?

I think we've still got plenty of ups and downs to come and that the real upside won't be until the takeover issue is decided, be it on or off. I see MET are still planning to "dispatch the scheme materials in late April," but do we have any firm dates on when the deal is supposed to be set in stone, or are all dates out the window? In the meantime, hopefully the legal costs don't get out of control.

[Cyclical]

I have been investing on the sharemarket for over 30 years and I still don't understand it ! Overnight I had a buy order for 10,000 MET at just over $4. This morning I saw the market release and thought here comes an expensive legal stoush and so dropped my buy price to just under $4. The price of course took off, yet again proving that it's never too late to learn a thing or two.

zacman

If it's any consolation, I had one overnight too at $4.05 that didn't go through and then chased it to the mid 4s but both ASB and Sharesies were way too slow (maybe that's an issue with NZX itself?). Eventually landed some when things settled down and some more later in the day when it pulled back, just to average up the stash I've picked up over the last couple of weeks :mellow:

[nztx]

If it's any consolation, I had one overnight too at $4.05 that didn't go through and then chased it to the mid 4s but both ASB and Sharesies were way too slow (maybe that's an issue with NZX itself?). Eventually landed some when things settled down and some more later in the day when it pulled back, just to average up the stash I've picked up over the last couple of weeks :mellow:

Some of mine went through today @ around $4.40's as well at market.
probably a lot of buyers out there digesting things over the weekend, which saw buy orders today with SP rising
The closing Buy/Offer bids from the old week may have been hint of what could happen
Still happy to hold & accumulate further & not worried about a slight averaging up today

[King1212]

No issue with legal fees....the deposit that buyer paid. .. MET can use the fund

[dompf]

NTA $7 some discounting here maybe..say 10% max for real estate prices ; agreed buy out at $7 against three competing offers to look at purchasing the company. Major shareholders correct me if I’m wrong 19% superfund aprox 6% ACC now after increasing their shareholding after arbitrage are selling down.

today announcement Met fighting the Withdrawal of take over offer at $7 and reinforce guidance of profit forecast of 80-90m despite covid-19. And folks think this share will go down in current asking.

too much value here for me; also with buy offers potentially around and the current offer still could go through. Way too much value. Happy holder; I hope litigation unnecessary and they come to a mutual agreement with funds that have already done due diligence

[King1212]

Totally agreed...look at KPG...down 8.5% on valuation....that saying their portfolio exposed to retailer.

Around 15% down on NTA.

So....let say 20% shaved off MET NTA of $7....then we still got $5.60

[Scrunch]

NTA $7 some discounting here maybe..say 10% max for real estate prices ; agreed buy out at $7 against three competing offers to look at purchasing the company. Major shareholders correct me if I’m wrong 19% superfund aprox 6% ACC now after increasing their shareholding after arbitrage are selling down.

today announcement Met fighting the Withdrawal of take over offer at $7 and reinforce guidance of profit forecast of 80-90m despite covid-19. And folks think this share will go down in current asking.

too much value here for me; also with buy offers potentially around and the current offer still could go through. Way too much value. Happy holder; I hope litigation unnecessary and they come to a mutual agreement with funds that have already done due diligence

Many shareholders would probably now accept a discounted offer, but as STU showed, when management/directors become obsessed with their valuation of the company, potential takeovers fall over. If a revised lower offer emerges, it will be interesting to see if the directors swing in supporting this lower offer or dismiss it as being inadequate.

[King1212]

U are talking a separate business here

[Beagle]

Totally agreed...look at KPG...down 8.5% on valuation....that saying their portfolio exposed to retailer.

Around 15% down on NTA.

So....let say 20% shaved off MET NTA of $7....then we still got $5.60

Retail malls and retirement homes are two very, very different asset classes.

First there's the issue of whether they're entitled to withdraw the offer at all.

Second I modelled up a 7.5% projected decline in residential real estate prices that's the average of what economists are expecting in the year ahead and assuming a 2.5% increase in the first two months of 2020 when the residential market was going gangbusters I came out with an estimated NTA in April 2021 of $6.16 if indeed the market does in fact drop 7.5% over the year ahead, which is by no means certain.

Lastly there's the issue of accrued earnings between now and April 2021 so if you're going to base a current takeover on future expected NTA you have to account for future expected underlying profit over the year ahead and working on say $90m that's 42 cents per share which would give an expected future NTA as at April 2021 of $6.16 + 0.42 = $6.58, (I reiterate, only if in fact average real estate prices fell by 7.5%) When you add in the extra 17 cents earnings I refer to below that sheets it all up to $6.58 + 0.17 = $6.75 so even if residential real estate does drop by 7.5% over the year ahead to April 2021 there's still $6.75 of value counting earnings to that period which is not materially dissimilar to the $7 proposed takeover price.

There's also another issue nobody has touched on to date. NTA was $7.00 as at 31 December 2019 By the end of May 2020 the company will have a further 5 months of accrued earnings and going off the mid point of the companies own forecast for FY20 of $86.5m on 213m shares, that's 41 cents per annum of earnings or about 3.4 cents per month so on 5 months accrued earnings to the end of May 2020 there's another 17 cents of accrued value right there !

In other words there is already a 17 cent buffer of extra value built into the current deal of $7 and are getting $7.17 of value for $7.00.

Talk of a heavily revised offer does not sit comfortably with me and would not get my support. I'd rather the company sued for specific performance or damages and if we can't get a full and fair price I'm more than happy to keep my shares long term.

[bottomfeeder]

No issue with legal fees....the deposit that buyer paid. .. MET can use the fund

Not usual to pay a deposit on a takeover. They may have bought a stake on the open market, after all they are not buying the bare assets. So I would say legal fees on an unsucessful court case will be shareholders money down the drain. If this brings the SP under $4 tomorrow, good. I will buy as many as I can afford

[King1212]

Yes....I am aware with Master Beagle....I am just comparing the worst....20% off from current $7. Worst case scenario!

[Beagle]

I'd rather keep my shares at $5.60 mate. (Some people might infer from that comment I am interested in buying more at around this level and they'd be right to infer that).

[King1212]

Kapai Master Beagle! Will keep buying then....

[Chiefy14]

Are the ORA's struck on a fix priced basis (i.e fixed percentage of market value as at point of sale)? Trying to get my head around the impact on NTA from the ORA leverage should property values decline. Vast majority (if not all) of statutory profit is through revaluations, and "underlying earnings" lean heavily on gains (losses) on resale

[bottomfeeder]

I don't like to chase the share price of a rising stock, but I bought some more under $4.30. The main reason is a hedge for the coming inflationary effects on the economy, from all of the government spending. I feel confident also that the SP will reach $5.00 easily when the funds getting out finally sell their last shares. I don't feel like paying any more than the $4.30. But never say never.

[Cyclical]

I don't like to chase the share price of a rising stock, but I bought some more under $4.30. The main reason is a hedge for the coming inflationary effects on the economy, from all of the government spending. I feel confident also that the SP will reach $5.00 easily when the funds getting out finally sell their last shares. I don't feel like paying any more than the $4.30. But never say never.

Yeah, I said further up that I think we'll be seeing further volatility on this one until we know for sure one way or the other what is happening with the take over. Bit silly really as the fundamentals are still good regardless. Wouldn't be surprised to see it dip back into the $3.something when APVG comes back making the wrong noises. Better keep some powder dry just in case.

[King1212]

Bought another parcel! Bless me Master Beagle!

[Beagle]

Yeah, I said further up that I think we'll be seeing further volatility on this one until we know for sure one way or the other what is happening with the take over. Bit silly really as the fundamentals are still good regardless. Wouldn't be surprised to see it dip back into the $3.something when APVG comes back making the wrong noises. Better keep some powder dry just in case.


Bought another parcel! Bless me Master Beagle!

See above. Think long term.

[King1212]

Kept buying....no matter what. Will stop at $5....

[Ascend]

Thanks for sharing your assumptions.

I would be slightly more conservative and assume a 7.5% write down without the 2.5% increase since year start. I would also not include any earnings.
I would even revise down propery growth rates in the future.

This gives a rough NTA of $5.37.

[bull....]

wouldnt be surprised if the troops have left the train lol very quiet today compared to the last week of ....

[Beagle]

No way Bull. I am absolutely 100% committed long term shareholder, unless someone makes me an offer I can't refuse :D

[bull....]

No way Bull. I am absolutely 100% committed long term shareholder, unless someone makes me an offer I can't refuse :D

good call plenty of others pretty quiet on the thread today , yesterday might have been to tempting for a few eh

[Balance]

good call plenty of others pretty quiet on the thread today , yesterday might have been to tempting for a few eh

What’s there to comment on today which have not been commented on yesterday when there was a very significant development?

Come out with something new, bull ...

Or is it a case of you still hanging around here like a bad smell because you missed the opportunity to sell the stock last weekyou sold at the $4.60 it spiked to yesterday or the opportunity to buy back below where you sold? :t_up:

[nztx]

Bought another parcel! Bless me Master Beagle!


Likewise here too

[peat]

No way Bull. I am absolutely 100% committed long term shareholder

Don't believe him - Even the bonds he buys have to have a seven day redemption clause.

[Beagle]

Don't believe him - Even the bonds he buys have to have a seven day redemption clause.

LOL - You've got to hold those Kiwi bonds for a whole month before you can exercise the 7 day redemption clause. I want more MET and time is dragging on with those bonds ;)

[Balance]

LOL - You've got to hold those Kiwi bonds for a whole month before you can exercise the 7 day redemption clause. I want more MET and time is dragging on with those bonds ;)

The lowest volume traded that we have seen for weeks - a sure sign the arb funds are holding back and it's just traders playing the stock today?

Up, up and away from tomorrow if the arb funds have stopped selling.

[bottomfeeder]

Yeah, I said further up that I think we'll be seeing further volatility on this one until we know for sure one way or the other what is happening with the take over. Bit silly really as the fundamentals are still good regardless. Wouldn't be surprised to see it dip back into the $3.something when APVG comes back making the wrong noises. Better keep some powder dry just in case.

Good advice, will wait a bit just in case we have a second crash.

[nztx]

Good advice, will wait a bit just in case we have a second crash.

Good point

Aust must have been down today, going by the Aussie Banks on NZX, but not surprising with
the turmoil around the Virgin Australia heading into Administration..
Things generally down on NZX today a bit, but with exceptions .. NZX tomorrow will be interesting

[Soolaimon]

Got in today at the bottom of the days range. Only 2000 but there were 7 transactions to fill the order. Is this the Sharesies effect and now with lesser volumes they may play more of an effect on the price going forward?

[nztx]

Got in today at the bottom of the days range. Only 2000 but there were 7 transactions to fill the order. Is this the Sharesies effect and now with lesser volumes they may play more of an effect on the price going forward?


probably just a symptom of lack of large Arb parcels being liquidated - as inferred in an earlier posting

[Beagle]

The lowest volume traded that we have seen for weeks - a sure sign the arb funds are holding back and it's just traders playing the stock today?

Up, up and away from tomorrow if the arb funds have stopped selling.

One wonders how they are going to play this now ? The original takeover is potentially still on and there's two other suitors that could come out of the woodwork.

[Beagle]

I wouldn’t bank on the two birds in the bush. They never fronted with an offer the first time round and if they are industry players will no doubt be nursing their wounds and trying to conserve cash.

You could be right mate. I've bought a good stake that I am happy to keep long term. If someone wants to pay me a fair price in due course that's fine but I'm quite relaxed either way.

[nztx]

I wouldn’t bank on the two birds in the bush. They never fronted with an offer the first time round and if they are industry players will no doubt be nursing their wounds and trying to conserve cash.


What wounds ?

As I see it a few inconveniences in comparison to other sectors .. Okay perhaps increased payroll .. more PPE & lockdown expenditure.
Perhaps in medium term perhaps some sales distortions, but underwritten by willing prospective buyers & occupants.
Financing may be a factor & how to value, but presumably if the others are well established operators in the sector, they will be
aware of what they are looking at with MET

[Balance]

What wounds ?


Exactly! Times like this are when PE funds clean up - having sold many of their dogs and puppies in the last 5 years to the booming Stockmarket, they are cashed up and ready for their next forays!

[Baa_Baa]

If one buys with the intent of selling into a better price, albeit caveated on some discussion group with platitudes of 'long hold' which hold no water in the eyes of the tax regulator, then one is a trader by definition.

In such circumstance, one must take into account 33% tax on gains from sales (assuming highest tax bracket), plus losses from the buy and then sell trade fees. For large trades this adds up to large tax/fees exposure, though as a percentage applies to any trader.

That means for a momentum trader, and there are a few very clever ones here, or any trader with intent to sell into a higher share price, one needs to beat their market buy price by 33% + fees, just to break even. That's a high bar to achieve and I think that very few take into account the after effects of taking a trading position that they have a clear intent when buying, of selling for a higher price.

Ignoring this in technical terms is tax evasion, not tax avoidance. The treatments that the IRD have for tax evasion are punitive, including hefty fines and even incarceration.

We don't hear a lot, or anything really, about how the opportunists here mitigate against their trading exposure to tax on capital gains and accounting for trade fees, it's like those two things don't even exist. But they do.

[Cyclical]

If one buys with the intent of selling into a better price, albeit caveated on some discussion group with platitudes of 'long hold' which hold no water in the eyes of the tax regulator, then one is a trader by definition.

In such circumstance, one must take into account 33% tax on gains from sales (assuming highest tax bracket), plus losses from the buy and then sell trade fees. For large trades this adds up to large tax/fees exposure, though as a percentage applies to any trader.

That means for a momentum trader, and there are a few very clever ones here, or any trader with intent to sell into a higher share price, one needs to beat their market buy price by 33% + fees, just to break even. That's a high bar to achieve and I think that very few take into account the after effects of taking a trading position that they have a clear intent when buying, of selling for a higher price.

Ignoring this in technical terms is tax evasion, not tax avoidance. The treatments that the IRD have for tax evasion are punitive, including hefty fines and even incarceration.

We don't hear a lot, or anything really, about how the opportunists here mitigate against their trading exposure to tax on capital gains and accounting for trade fees, it's like those two things don't even exist. But they do.

I'm sure you know this and, apologies, I'm probably misreading what you've put there, but you do only get taxed on the profit, right? So it's not like "...one needs to beat their market buy price by 33% +..."

[Balance]

That means for a momentum trader, and there are a few very clever ones here, or any trader with intent to sell into a higher share price, one needs to beat their market buy price by 33% + fees, just to break even. That's a high bar to achieve and I think that very few take into account ....

You lost me completely!

If you are a trader, you pay tax on 33% of any gains (sell price less buy price).

Where did you get your buy price + 33% of the buy price as a break even point?

To illustrate :

Buy price - $3.00
Sell price - $$4.00
Gain - $1.00
Tax @ 33% = 33c
Net gain = 67c

What you are saying though is this and is entirely illogical :

Buy price - $3.00 and you are saying that share price must increase by 33% to $4.00 or $1.00 to break even?:scared:

[peat]

thats what he said Balance. :confused:

[Balance]

thats what he said Balance. :confused:

Then, he is plain wrong.

A trader pays tax only on gains he makes - so the hurdle rate is anything above 0.00001%, definitely not 33%.

[Ace]

Then, he is plain wrong.

A trader pays tax only on gains he makes - so the hurdle rate is anything above 0.00001%, definitely not 33%.

That's right, it's called capital "gains" tax, not capital tax. I'd hate if it was a tax on all capital every time it's traded in the market, sounds like that would be the best money making scheme.

[Balance]

That's right, it's called capital "gains" tax, not capital tax. I'd hate if it was a tax on all capital every time it's traded in the market, sounds like that would be the best money making scheme.

Shhhhh .... Baa Baa may take that capital idea to Cindy! She is looking for new avenues of taxing the capitalist property and asset owning class.

[nztx]

Shhhhh .... Baa Baa may take that capital idea to Cindy! She is looking for new avenues of taxing the capitalist property and asset owning class.


God forbid -- not another B*******d FIF style Tax being dreamed up surely to inflict on everyone ..

[King1212]

One could argue...the market is too vilotile...got panicked n sold for profit... good reason to avoid tax

[nztx]

One could argue...the market is too vilotile...got panicked n sold for profit...

May be true of the departing Arb Funds to a degree, while many existing & newer holders are eyeing potential future value & the Arb's possible foregone opportunity

[peat]

Shhhhh .... Baa Baa may take that capital idea to Cindy! She is looking for new avenues of taxing the capitalist property and asset owning class.


That's right, it's called capital "gains" tax, not capital tax. I'd hate if it was a tax on all capital every time it's traded in the market, sounds like that would be the best money making scheme.

ah heaven forbid the Tobin tax, don't want no mention of that round here thank you very much

[Balance]

God forbid -- not another B*******d FIF style Tax being dreamed up surely to inflict on everyone ..

Grant Robertson has already stated that in time, which means 2021 budget (if Labour is still in power), the government will be looking at how the country will reduce the debts piled up to counter the economic impact of the virus.

It is the right thing to do - focus on cushioning the economy first but I expect true to form, Labour will use the opportunity to 'sock' it to the rich:

- increase in marginal income tax to 39% & 45% (transitionary & temporary .. Tui one this morning),

- wealth tax on property,

- increase in GST (temporary of course ...pass the Tui...) to 20%,

- more levies on petrol, road charges, surcharges on utilities,

- levy on financial transactions,

and Cindy will be flying the kite with CGT (because the public demands it ... pass the third Tui).

As long as the subsidy for care & rest-homes is increased and national super is adjusted for the above, MET will be fine however.

[Baa_Baa]

If you are a trader, you pay tax on 33% of any gains (sell price less buy price).

Yes correct, tax on the gains. Poorly worded on my part. Another lesson on reading ones posts before posting. Still, there are folks posing as investors when really they are traders and do need to keep in mind that their returns are net of buy/sell fees and tax.

Thanks for the correction.

[dabsman]

Grant Robertson has already stated that in time, which means 2021 budget (if Labour is still in power), the government will be looking at how the country will reduce the debts piled up to counter the economic impact of the virus.

It is the right thing to do - focus on cushioning the economy first but I expect true to form, Labour will use the opportunity to 'sock' it to the rich:

- increase in marginal income tax to 39% & 45% (transitionary & temporary .. Tui one this morning),

- wealth tax on property,

- increase in GST (temporary of course ...pass the Tui...) to 20%,

- more levies on petrol, road charges, surcharges on utilities,

- levy on financial transactions,

and Cindy will be flying the kite with CGT (because the public demands it ... pass the third Tui).

As long as the subsidy for care & rest-homes is increased and national super is adjusted for the above, MET will be fine however.

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...

[thedrunkfish]

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...

I would start packing then.

[Cyclical]

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...


I would start packing then.

Yep, the only chance of it being any other way is if there is a major uncontrollable outbreak once restrictions are lifted/eased and there is much death and suffering and the economy really goes to the dogs and unemployment surges to 20%+ and National find a great leader and they suddenly decide that they can work with Winnie who surges in popularity off the back of making the most from Labour's mistakes (he'll be looking for them as we speak)... Not impossible, but there are a few stars that need to be aligned. Have fun in Bali.

[dobby41]

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...

Bye then .

[youngatheart]

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...

Byeeee!!! Fair weather friend. There are people who will lose their jobs, homes and mental wellbeing and your more concerned about going from being rich to moderately well off. FFS.

[Balance]

Byeeee!!! Fair weather friend. There are people who will lose their jobs, homes and mental wellbeing and your more concerned about going from being rich to moderately well off. FFS.

Back up the horses, youngatheart.

I don't think dabsman is concerned about going from rich to moderately off - he is concerned with the political agenda of this 'all care & no responsibility & no clue' government.

The answer to NZ getting out of this mess is by everyone working together.

Which is NOT what this government is doing.

It is pursuing a socialist agenda of punishing the wealth creators, the risk takers, the hard workers and the savers - proof being the numerous measures they have taken against farmers, property owners and now, the lop-sided $10 billion wage subsidy which is simply a bandaid. If businesses do not survive, what's the point of keeping employees on life-support?

Think about it.

[winner69]

Don’t think Overseas Investment Office approved yet (might be wrong)

Be hilarious if they kibosh the deal

[youngatheart]

Back up the horses, youngatheart.

I don't think dabsman is concerned about going from rich to moderately off - he is concerned with the political agenda of this 'all care & no responsibility & no clue' government.

The answer to NZ getting out of this mess is by everyone working together.

Which is NOT what this government is doing.

It is pursuing a socialist agenda of punishing the wealth creators, the risk takers, the hard workers and the savers - proof being the numerous measures they have taken against farmers, property owners and now, the lop-sided $10 billion wage subsidy which is simply a bandaid. If businesses do not survive, what's the point of keeping employees on life-support?

Think about it.
Re:the GFC experience, throwing $s at business didn't work out well for the fewer jobs and low paid work that followed now did it... The profits were there but the workers who helped create it didn't see much of it...

[youngatheart]

Anyhow, back to MET. What's happening to the SP?

[Balance]

Re:the GFC experience, throwing $s at business didn't work out well for the fewer jobs and low paid work that followed now did it... The profits were there but the workers who helped create it didn't see much of it...

NZ enjoyed 'rock-star' economic status - for successfully handling the GFC and two earthquakes in ChCh.

[Chinesekiwi]

If the country is dumb enough to vote these muppets back in then I will move my plans to become non-resident a few years earlier! Bali would be nice now thou...


Wow - at times I am confused is this a WhaleOil/Kiwiblog forum?

At times the poverty of spirit, invective, crassness and foul derision is just too much.

I get a real sense that this government no matter what they do (not a Labour voter btw) will never satisfy some here but the nasty personal name calling (Cindy ? - really, aren't we grown adults?) is churlish at best, something I'd chastise my teenage son for.

Yes there will be much pain to come, yes hard solutions will be needed, yes you and I will pay in all this, yes this govt. needed to get business leaders involved earlier to help formulate solutions going forward.


Would the Nats done anything ultimately any more significantly better or worse? faster or slower? - we will never know.

I am saddened by the pettiness here at times.

Back on thread - I am accumulating MET.

[ynot]

Yes correct, tax on the gains. Poorly worded on my part. Another lesson on reading ones posts before posting. Still, there are folks posing as investors when really they are traders and do need to keep in mind that their returns are net of buy/sell fees and tax.

Thanks for the correction.

On that note, up until recently I have not spent a lot of time on this site, one thing I have only recently become more aware of is the 2 types of on here, traders v investors. 2 entirely different kettles of fish. I wonder if some on here are distracted by comments from the other camp at times.

[RTM]

On that note, up until recently I have not spent a lot of time on this site, one thing I have only recently become more aware of is the 2 types of on here, traders v investors. 2 entirely different kettles of fish. I wonder if some on here are distracted by comments from the other camp at times.

I think you are absolutely correct. And then there are of course some who flip flop from camp to camp.

" I am absolutely 100% committed long term shareholder, unless someone makes me an offer I can't refuse "

[Raz]

I think you are absolutely correct. And then there are of course some who flip flop from camp to camp.

" I am absolutely 100% committed long term shareholder, unless someone makes me an offer I can't refuse "

Ha wonder who that would be barking:) Still to be on topic MET SP keep deflating.....

[Cyclical]

I think you are absolutely correct. And then there are of course some who flip flop from camp to camp.

" I am absolutely 100% committed long term shareholder, unless someone makes me an offer I can't refuse "

Haha, I think Beagle was referring to the possibility of a takeover on the horizon, of which there is still a reasonable chance.

[ynot]

Ha wonder who that would be barking:) Still to be on topic MET SP keep deflating.....

So it should. Let's scrape this dead cat of the road and get on with the onslaught.

[Leftfield]

..........one thing I have only recently become more aware of is the 2 types of on here, traders v investors. 2 entirely different kettles of fish. I wonder if some on here are distracted by comments from the other camp at times.

You have just learned a valuable lesson. Very important for each investor to make their own decisions based on their own personal investment strategy.

Disc - Long term investor and since I made that fundamental decision I've slept better and my portfolio has outperformed
NZX50 av every year.

[Cyclical]

Still to be on topic MET SP keep deflating.....

Yeah, I've had a buy order on there at $4.11 for a couple of days, which I decided to pull this morning, mainly because my average buy price is not looking so rosy anymore and I wouldn't be surprised to see it dip back into the $3.something yet...need to keep some powder spare.

Kinda feels to me like the honeymoon period for the market as a whole might be coming to an end...touch of reality starting to set in perhaps...

[dabsman]

Back up the horses, youngatheart.

I don't think dabsman is concerned about going from rich to moderately off - he is concerned with the political agenda of this 'all care & no responsibility & no clue' government.

The answer to NZ getting out of this mess is by everyone working together.

Which is NOT what this government is doing.

It is pursuing a socialist agenda of punishing the wealth creators, the risk takers, the hard workers and the savers - proof being the numerous measures they have taken against farmers, property owners and now, the lop-sided $10 billion wage subsidy which is simply a bandaid. If businesses do not survive, what's the point of keeping employees on life-support?

Think about it.

Never thought I'd agree with you Balance but you got the point 100%. We are taxed so heavily so morons can make decisions with our money. If it wasnt the truth it would be a Saturday Night Live or Monty Python skit. But this is MET thread so I will say I'll definitely be buying more if under $4

[Beagle]

MET down less than the rest of the sector today, probably because of the deep value on offer.

[Ace]

MET down less than the rest of the sector today, probably because of the deep value on offer.

Thanks for bringing MET up on my radar. I recall several years ago when you were a fan of SUM and SUM was one of the popular picks at the sharetrader meeting which I didn't follow suit. This time I'll come along with you guys for the ride with MET and have picked up a parcel to add to my collection.

There's a fair few near term catalysts with the response to AVPG later this week which is in a couple of days, and delivery of SIA material by the end of April, which is around a week including the weekend. Granted there is every possibility that AVPG/EQT will see the SIA terminated through the MAC clauses. Reading the announcement on the 20th shows me that MET management is relatively confident in their reasoning why the agreement will come to fruition and reading it myself, it does appear to make a lot of sense as fundamentally the company is more or less the same to when AVPG entered willfully into the agreement.

I'm not banking on the takeover and if it falls through I share your sentiment that the company has sound fundamental prospects in the sector, and I do quite enjoy that there is potentially some entertainment value in this moving forward to the near future. Life in lockdown has been a little bit dull afterall.

[winner69]

MET down less than the rest of the sector today, probably because of the deep value on offer.

Maybe down because punters read this

https://www.anz.co.nz/content/dam/an...O-20200422.pdf

[Grimy]

Link doesn't work for me.....

[bull....]

met needs to pay a corona allowance to staff as do all

[Balance]

Link doesn't work for me.....

Try this one :

https://www.stuff.co.nz/business/121178914/truly-enormous-economic-hit-will-push-jobless-to-11-house-prices-down-15-anz

House prices expected to drop 15%.

In which case MET’s $7 valuation becomes $5.95.

Plenty of fat in the valuation vs the other village operators.

[Grimy]

Thanks.
I think Winner meant this one
https://www.anz.co.nz/content/dam/anzconz/documents/economics-and-market-research/2020/ANZ-QEO-20200422.pdf

Which looks the same URL, but this one works for me.

[bull....]

Link doesn't work for me.....

heres the good bit


House prices are expected to fall significantly, as typically happens in economic downturns. House prices normally swing much more than GDP does. At this stage we expect to see house prices drop 10 per cent to 15 per cent, with demand under considerable pressure. There is downside risk to this, particularly if credit becomes squeezed."

https://www.stuff.co.nz/business/121178914/truly-enormous-economic-hit-will-push-jobless-to-11-house-prices-down-15-anz

retirement unit prices falling 10 - 15% be pretty savage on profits , no divs for sure from any of them or gains on sales

[Ace]

heres the good bit


House prices are expected to fall significantly, as typically happens in economic downturns. House prices normally swing much more than GDP does. At this stage we expect to see house prices drop 10 per cent to 15 per cent, with demand under considerable pressure. There is downside risk to this, particularly if credit becomes squeezed."

https://www.stuff.co.nz/business/121178914/truly-enormous-economic-hit-will-push-jobless-to-11-house-prices-down-15-anz

retirement unit prices falling 10 - 15% be pretty savage on profits , no divs for sure from any of them or gains on sales

I can’t even take any of these forecasting articles seriously anymore. I don’t think any of them have been remotely correct over the years. Wasn’t there an article out there predicting a rise as well due to all the expats and Australians returning home because NZ is a safe haven? So which one is it? Down up? Left or right?

[Beagle]

Maybe down because punters read this

https://www.anz.co.nz/content/dam/an...O-20200422.pdf

We know quite a lot about ANZ's "credibility" with economic predictions don't we mate ;) Quite right Ace, they're all throwing darts while blindfolded.
If they are going to print out these economic reports (as opposed to electronic media), I hope they print them on toilet paper ;)

[dibble]

I can’t even take any of these forecasting articles seriously anymore. I don’t think any of them have been remotely correct over the years. Wasn’t there an article out there predicting a rise as well due to all the expats and Australians returning home because NZ is a safe haven? So which one is it? Down up? Left or right?

Yeah its interesting. House demand changes for all sorts of reasons but ours is fundamentally driven by high immigration (simple supply and demand, 60-90000 new people into 10-20,000 new houses). Anecdotally there is already years of pent up demand, thus even a slight drop might bring out buyers...well, buyers with jobs I suppose. I'll probably be watching unemployment and immigration numbers closer than GDP changes for this.

[winner69]

If the OIO doesn’t approve the deal it’ll save a lot of legal costs in the stoush that’s unfolding.

[Bjauck]

Yeah its interesting. House demand changes for all sorts of reasons but ours is fundamentally driven by high immigration (simple supply and demand, 60-90000 new people into 10-20,000 new houses). Anecdotally there is already years of pent up demand, thus even a slight drop might bring out buyers...well, buyers with jobs I suppose. I'll probably be watching unemployment and immigration numbers closer than GDP changes for this.
If there is net immigration in the next year, I think it will be mostly as the result of returning ex-pat Kiwis. No doubt many returnees will be the ones who have lost their employment overseas, and who will be looking for work in our recession hit economy. If they are in the market to buy a house, it will have to be at a cheap price.

Greater unemployment, reduced incomes, returning unemployed ex-pat kiwis will all mean more overcrowding as a result of failed government policies failing to ensure sufficient supply of housing for past immigration policies. The demand for boarding houses and tenement-ype accommodation may increase. I doubt it will mean the current expensive (high multiples of pre-covid 2019-level household income required) real estate prices will continue.

[Cyclical]

I don't think we need to put too much emphasis on the immigration thing...it'll be plus or minus ~20k or whatever. Fundamentally we are short of houses in this country, apparently. Some of that will be because of second homes, Air BNB etc, some of which will be freed up. There will be plenty of unemployment, which won't help, and FHB's Kiwisaver deposits would have taken a hit. But on the other hand, if LVR restrictions disappear and interest rates continue to track down, there will be plenty of people out there looking to snap up bargains as they come to market. I don't think we'll see anymore than a 10% drop over the next couple of years, probably less, and then maybe flat for a year or two after that (which if you inflation adjust might equate to another 5 or 6% drop). Big deal, life goes on, the grey head count will continue to increase (virus not withstanding) and there is plenty of head room in MET's NTA at the present share price levels.

[bull....]

air n b house will swamp the market as soon as restrictions are lifted . people will either sell them or rent them so this will have a depressing effect on the supply side of houses i would think. immigration is no longer a demand driver. people losing there jobs in the thousands from june/july after the subsidy runs out will create more supply as they become forced sellers. So i see a possibility of a dip in property. wouldnt have a clue how much but we will know in hindsight

[crighton100]

As an old fella,if my memory serves me right,after every big problem the sharemarket has had to encounter, property prices have dropped in a big way.I think this time is a bit different in as much as the uncertain future,which I think will make the property market both residential & commercial go down more than people expect.So there could be some bargains to be had,because after a year or two the property prices rage again.Just a thought for you young experts.

[macduffy]

Not a direct influence on MET, but a dearth of tourists = a surplus of Airbnb's = more accommodation to meet our current shortfall of housing. No consolation to those badly affected in the tourism sector but some benefit to others.

[thegreatestben]

Very useful insight and information being shared here and in general, thanks to all who contribute!
Have cracked into the market post-corona, terrifying in many ways as I've put 165k in.

Sleeping has been troublesome but the information in this thread makes me feel good about my MET buys.

[dibble]

"it'll be plus or minus ~20k or whatever"
I agree with your conclusion but what makes you think immigration will drop from 60k or whatever to 20k (genuine Q, not a dig), obviously without the physical means to get here for some (or many) months there will be a hiatus but are you suggesting the pipeline has dried up i.e applications and approvals will drop? Might there be a sudden surge when flights resume? This could alter housing demand quiet suddenly.

[winner69]

I assume the independent advisors value range will have to include the $7.00

Maybe lowered original thinking and will report $6.60 to $7.05 ...what a joke that would be in these times

But some would say that’s about right ...MET is really really cheap at the moment

[Balance]

I assume the independent advisors value range will have to include the $7.00

Maybe lowered original thinking and will report $6.60 to $7.05 ...what a joke that would be in these times

But some would say that’s about right ...MET is really really cheap at the moment

I have allowed for a 20% discount to the last MET valuation of $7.00 which is on the pessimistic side - so new NTA will be $5.60.

A re-negotiated deal will see a price of between $5.60 to $6.00.

That's my take anyway.

[winner69]

I have allowed for a 20% discount to the last MET valuation of $7.00 which is on the pessimistic side - so new NTA will be $5.60.

A re-negotiated deal will see a price of between $5.60 to $6.00.

That's my take anyway.

So the parties might have a chat to come up with a ‘range’ for the report that makes every body look good (in the circumstances)

[Balance]

So the parties might have a chat to come up with a ‘range’ for the report that makes every body look good (in the circumstances)

Always the case as you know from past experience, W69.

How often do we ever see a dissenting 'independent' valuation report?

I can recall just a handful - Shooter Jet, Just Water and Abano?

[JeremyALD]

Not sure if this is already posted, but there is some serious bad blood between metlifecare and APVG.

https://www.google.com/amp/s/amp.rnz.co.nz/article/ea36e085-8bb2-43aa-820a-a6b5acb27139

[macduffy]

Not sure if this is already posted, but there is some serious bad blood between metlifecare and APVG.

https://www.google.com/amp/s/amp.rnz.co.nz/article/ea36e085-8bb2-43aa-820a-a6b5acb27139

Well, we wouldn't expect them to be entering the courtroom arm in arm, would we!

;)

[nztx]

Well, we wouldn't expect them to be entering the courtroom arm in arm, would we!

;)

APVG might be happy to depart that way, when & if they discover the Scheme was the cheapest way to exit
the stoush with their credibility & wallet somewhat more intact ..

[Balance]

APVG might be happy to depart that way, when & if they discover the Scheme was the cheapest way to exit
the stoush with their credibility & wallet somewhat more intact ..

There is a thing call the law - and enforceable.

[nztx]

There is a thing call the law - and enforceable.

for sure -- that's why the 'when & if' ..

[bottomfeeder]

Jeez is it worth it. Such a court case would suggest that the offer was way above value, in the first place. Maybe MET should settle out of court, and go for costs etc, and a little extra to boot. After all a takeover offer does cost the offeree quite a bit in time and valuations, consultants etc. Perhpas that is the most likely outcome.

Sometimes you have to check yourself. Are we being too exuberant about the value of MET. Maybe, but I think with the coming inflationery impact of government spending and the ever increasing older population (unless we reneg and go the way of sweeden) MET is a good hedge against what may be to come in our economy. I'm getting to an age where I will have to consider retirement villages sooner rather than later. We just dont have an alternative, its all or nothing. Just a fact that you cant avoid. My mother in Law is still in her own home, but her kids just wish she had done something a lot sooner. Perhaps MET may not be the golden goose, but it will hold value better than cash in the months to come.

[peat]

Such a court case would suggest that the offer was way above value, in the first place.

Are we being too exuberant about the value of MET.

This has nothing to do with the value of MET. The Court isn't there to determine that, they are there to determine whether there has been an MAC or not. IF not then front up with the 7 MotherFLicker

[Scrunch]

Sometimes you have to check yourself. Are we being too exuberant about the value of MET. Maybe, but I think with the coming inflationery impact of government spending and the ever increasing older population (unless we reneg and go the way of sweeden) MET is a good hedge against what may be to come in our economy.

I have to beg to differ, MET is arguably among the worst inflation hedge candidates of all the listed retirement operators. As Beagle has pointed out multiple times, it has a fixed fee for life policy. This might be good for attracting people and keeping the units full. It however is financially problematic if NZ were to get a serious case of inflation. There may be an out clause I'm not aware of but there weren't any if's or but's on the website link below.

https://www.metlifecare.co.nz/why-metlifecare/assurances

Resales are under 10% of existing unit numbers. This appears to indicate residents stay for over 10 years. In a low inflation environment the fees set ages ago are still sensible and cover current costs. Its probably not a big issue if the spike in inflation is to 2-3%, but what if we get 5 or 10% inflation for a few years. A 10% profit margin could reverse to 10-20%+ losses (that could then continue for many many years). This could destroy literally hundred's of millions of dollars relative to fees that increased with inflation.

But don't worry, we haven't had inflation in the last five years so it won't happen.

[Beagle]

Average tenure is 9.1 years according to the most recent report. The average age of residents right across the villages is now 82 years old. Since changing the minimum entry age to 70 years many years ago, (used to be as low as 55 years), the tenure is steading declining. The average age of residents to their brand new Red Beach village is 77 years.

SUM are the only retirement company holding out around this fixed fee for life thing and they think its not costing them sales. Put simply, I truly believe they are dead wrong. I can expand a lot more on this subject if people want me to.

SUM believe that capping the weekly fee increase at the rate at which national superannuation goes up doesn't cost them sales. There are a number of very powerful psychological and emotional factors at play here that SUM do not appear to understand despite extensive efforts on my part to help them.

I will list a few of the main key factors.
1. Old people absolutely crave financial certainty. There are so many uncertain things when you get older to worry about, principally one's health and healthcare costs but also around emotional needs and social companionship.
2. They know very well that their national superannuation will go up every year but they also know their health care costs are likely on average to increase at vastly more than the inflation rate so the extra financial security of a fixed weekly fee for life gives them an ever increasing annual buffer to weather any healthcare issues.
3. Many people of the age that are going into retirement villages have grown up in a post great depression era as children and learned to work with very strict budgets. Many budget everything down to the very last dollar. Fixing weekly fees for life is a very powerful marketing tool as residents know they will have a steadily increasing level of disposable income, (through annual increases in their national superannuation) to enjoy in their latter years.

Most retirement companies pitch the weekly fee at the mid point of the stay of the resident, e.g. if they know the weekly cost is presently $140 per week, they will add 4.5 years inflation at say 2.5% per annum and pitch it at a weekly fee of whatever that works out too, so they are ahead in the first half of the residents expected stay and behind in the second half.

The smarter retirement companies of which RYM are the most shrewd actually discount the weekly fee from current cost as a massive carrot and price all the inflation expectations around weekly fees into the up front unit cost.

MET are on the right track here. SUM have been unknowingly and unwittingly shooting themselves in the foot for years around this issue and SUM's poor sales rate for many years is the net result.

[Scrunch]

Average tenure is 9.1 years according to the most recent report. The average age of residents right across the villages is now 82 years old. Since changing the minimum entry age to 70 years many years ago, (used to be as low as 55 years), the tenure is steading declining. The average age of residents to their brand new Red Beach village is 77 years.

SUM are the only retirement company holding out around this fixed fee for life thing and they think its not costing them sales. Put simply, they are dead wrong.

Its good that MET are looking to increase the average age of residents - this should assist to turn over units more quickly and clip the ticket through resales of existing units more quickly. The past decision to open up units to people 55 years old was simply nuts. You could have someone living there for 40 years!!

In a way its also good that MET is in the same boat as other operators if they all have fixed fees (except SUM). That doesn't however remove the risk of high inflation from MET or the sector in general (although the probability of this still appears very small at present).

It is an interesting question because the economic textbook said printing money as they did during the GFC would ignite inflation. Except it didn't and no-ne could really explain well why inflation didn't happen. While its not quite GFC mk2, some governments are going down the same printing money (aka quantative easing) approach.

[zacman]

Not sure if this is already posted, but there is some serious bad blood between metlifecare and APVG.

https://www.google.com/amp/s/amp.rnz.co.nz/article/ea36e085-8bb2-43aa-820a-a6b5acb27139
I believe Mr Ellis is simplifying the problem, undoubtedly for the benefit of his shareholders but also to put on a strong litigious face.
I have not read the Deed but to suggest that there is no MAC because it's just the economic conditions and it has not impacted MET disproportionately with other operators seems simplistic. Whether or not others are affected would not detract from it being a Material Adverse Change for MET. The issue is the impact on them, not others.
Everyone maybe materially affected. The MAC would still apply.

zacman

[peat]

It is an interesting question because the economic textbook said printing money as they did during the GFC would ignite inflation. Except it didn't and no-ne could really explain well why inflation didn't happen. While its not quite GFC mk2, some governments are going down the same printing money (aka quantative easing) approach.

Shares and property have experienced inflation after the GFC.
But excluded from CPI so it doesn't increase the super.

[Beagle]

In theory, on paper, (excuse the pun), if the GFC caused a loss of XYZ and you simply printed XYZ and gave it to the people who lost it then there should be no change to the inflation rate.

This time if we're in some form of GFC - MK2 it looks like they might be printing ABC so the jury is out on whether that will be somewhat inflationary. More likely they will need some very efficient way to increase the tax take so increasing GST to 20% after this major exercise in social engineering is probably the easiest and one of the most efficient taxes, but unfortunately is also somewhat inflationary.

I started buying MET in the low $4 range in late 2019 well before there was any talk of a takeover. I continue to believe there is real long term value at this price.
Disc: 12.4% portfolio position, (my self imposed maximum on any one share is 14%).

[Panda-NZ-]

In theory, on paper, (excuse the pun), if the GFC caused a loss of XYZ and you simply printed XYZ and gave it to the people who lost it then there should be no change to the inflation rate.
]

I have concerns about impacts on the young particuarly. We need risk supportive people to be starting up businessses rather than those close to retirement and vulnerable to covid.

With loan repayments + GST + PAYE it will be in the range of 40-50% for those people and 0% for property holders in effective terms. Maybe a broadening of the tax base is called for while the prices remain low.

[allfromacell]

I believe Mr Ellis is simplifying the problem, undoubtedly for the benefit of his shareholders but also to put on a strong litigious face.
I have not read the Deed but to suggest that there is no MAC because it's just the economic conditions and it has not impacted MET disproportionately with other operators seems simplistic. Whether or not others are affected would not detract from it being a Material Adverse Change for MET. The issue is the impact on them, not others.
Everyone maybe materially affected. The MAC would still apply.

zacman

It may seem simplistic but it is exactly what's written in the deed (attached with highlighting). I'm certainly no lawyer but it does spell it out quite simply I think.

11397

[King1212]

So complicated...black and white. Any lawyer here that can just tell us.. whether we will win the case or not?

[allfromacell]

So complicated...black and white. Any lawyer here that can just tell us.. whether we will win the case or not?


I guess there will be dispute about the use of 'general'. It states the MAC is not valid if the change in NTA / earnings is due to 'general economic conditions'. Now we're currently in the middle of a pandemic with countries globally in a state of emergency, it's clear these times are not normal but as I read it that's not relevant. What is relevant is that the drop in NTA / earning will be due to a change in general economic conditions regardless of what caused that change, these changes are not disproportionately affecting MET.

[thegreatestben]

If it's decided that the MAC is not valid and the deal should go forward, what, if any recourse does this leave the buyer? Will this just get stuck in limbo for years?

[peat]

I guess there will be dispute about the use of 'general'. It states the MAC is not valid if the change in NTA / earnings is due to 'general economic conditions'. Now we're currently in the middle of a pandemic with countries globally in a state of emergency, it's clear these times are not normal but as I read it that's not relevant. What is relevant is that the drop in NTA / earning will be due to a change in general economic conditions regardless of what caused that change, these changes are not disproportionately effecting MET.

Yeh I pretty much go with this i.e. not disproportionately effecting MET ; but even if you can blame the virus (as opposed to general economic conditions) for causing a drop in earnings due to increased costs these are going to hard pushed to show 10%. If there are less sales, then that's due to economic conditions so doesn't count?

I think the Met directors have a strong case which they appear to recognise the value of fighting for , so that's a large potential upside with this one (even if it is ultimately not to $7). Worst case , just hold , it will revert to paying a divi.

[Benny1]

Average tenure is 9.1 years according to the most recent report. The average age of residents right across the villages is now 82 years old. Since changing the minimum entry age to 70 years many years ago, (used to be as low as 55 years), the tenure is steading declining. The average age of residents to their brand new Red Beach village is 77 years.

SUM are the only retirement company holding out around this fixed fee for life thing and they think its not costing them sales. Put simply, I truly believe they are dead wrong. I can expand a lot more on this subject if people want me to.

SUM believe that capping the weekly fee increase at the rate at which national superannuation goes up doesn't cost them sales. There are a number of very powerful psychological and emotional factors at play here that SUM do not appear to understand despite extensive efforts on my part to help them.

I will list a few of the main key factors.
1. Old people absolutely crave financial certainty. There are so many uncertain things when you get older to worry about, principally one's health and healthcare costs but also around emotional needs and social companionship.
2. They know very well that their national superannuation will go up every year but they also know their health care costs are likely on average to increase at vastly more than the inflation rate so the extra financial security of a fixed weekly fee for life gives them an ever increasing annual buffer to weather any healthcare issues.
3. Many people of the age that are going into retirement villages have grown up in a post great depression era as children and learned to work with very strict budgets. Many budget everything down to the very last dollar. Fixing weekly fees for life is a very powerful marketing tool as residents know they will have a steadily increasing level of disposable income, (through annual increases in their national superannuation) to enjoy in their latter years.

Most retirement companies pitch the weekly fee at the mid point of the stay of the resident, e.g. if they know the weekly cost is presently $140 per week, they will add 4.5 years inflation at say 2.5% per annum and pitch it at a weekly fee of whatever that works out too, so they are ahead in the first half of the residents expected stay and behind in the second half.

The smarter retirement companies of which RYM are the most shrewd actually discount the weekly fee from current cost as a massive carrot and price all the inflation expectations around weekly fees into the up front unit cost.

MET are on the right track here. SUM have been unknowingly and unwittingly shooting themselves in the foot for years around this issue and SUM's poor sales rate for many years is the net result.

It absolutely cost SUM the chance to sell my parents an independent living unit at a SUM village at the end of last year... That and the fact the salesman was a very good talker but never followed up with them ever!
They chased him a couple of times but in the end gave up on him.
They do have their names down on the waiting list at a MET village, however they are a little undecided with all that has happened the the mean time...
Personally I liked the SUM village as it was a lot newer and in a better position than the older MET village and I personally am not convinced about the level of care available at MET.. However I also was not in favour of the SUM fee situation.

[Snow Leopard]

It absolutely cost SUM the chance to sell my parents an independent living unit at a SUM village at the end of last year... That and the fact the salesman was a very good talker but never followed up with them ever!
They chased him a couple of times but in the end gave up on him.
They do have their names down on the waiting list at a MET village, however they are a little undecided with all that has happened the the mean time...
Personally I liked the SUM village as it was a lot newer and in a better position than the older MET village and I personally am not convinced about the level of care available at MET.. However I also was not in favour of the SUM fee situation.

Should take a look at what ARV or OCA can offer them.
These are the two stars of the listed retirement sector, and OCA is especialy good value as an investment when looked at objectively.

PS: DYOR, Take care & stay safe

[zacman]

It may seem simplistic but it is exactly what's written in the deed (attached with highlighting). I'm certainly no lawyer but it does spell it out quite simply I think.

11397

I stand corrected. ...as sometimes happens

zacman

[Beagle]

It absolutely cost SUM the chance to sell my parents an independent living unit at a SUM village at the end of last year... That and the fact the salesman was a very good talker but never followed up with them ever!
They chased him a couple of times but in the end gave up on him.
They do have their names down on the waiting list at a MET village, however they are a little undecided with all that has happened the the mean time...
Personally I liked the SUM village as it was a lot newer and in a better position than the older MET village and I personally am not convinced about the level of care available at MET.. However I also was not in favour of the SUM fee situation.

I wouldn't mind betting a dollar or two that your parents never complained about the lack of fixed fee for life either. Older people are too polite to complain, in my opinion if a fixed fee for life is important to them, and it is for most, they simply go elsewhere. SUM have some very nice villages but they really have their head in the sand over the weekly fee issue and it really irks me because I tried so hard to get Julian Cook to understand this. Its disappointing to hear that the salesman isn't doing his job. The simple procedure of telephoning to follow people up who have taken the considerable time to visit and tour through a village is the most basic of sales skills. Where do they hire these muppets ?

For what its worth I am impressed with how the retirement industry in general is managing the Covid 19 risks for our vulnerable residents.
My Mum is in a village, (not one of the listed operators on the NZX) but they are also really looking after her. Security guard, shopping done for them, and because she's 90 and very vulnerable she gets a daily call from the nurse to make sure she's okay. It really puts my mind at rest knowing how well they're looking after her.

Anyway...back to MET.
As I see it there are 5 possible outcomes.
1. MET encourage APVG to complete the takeover at $7 - Very low chance of this happening without court proceedings, (as the parties already appear to be adversarial).
2. They negotiate a lower price - Quite possibly an outcome with a realistic chance, (hope directors don't roll over like a fat Labrador and beg for a tummy rub at any price).
3. MET sue for specific performance or damages, VERY high chance of this happening, if either of the above don't happen but as with any court proceedings there are two possible outcomes and this is expensive and time consuming. The wording seems clear enough but case law precedent quite possibly will prevail, whatever that is.
4. One of the other two interested parties who originally expressed interest comes forward with a counter proposal (unlikely in my view)
5. Shareholders end up carrying the baby after a lot of noise and drama (I actually think this is a pretty good chance and am quite relaxed about it).

Plenty of drama to come here.

[Ace]

Anyway...back to MET.
As I see it there are 5 possible outcomes.
1. MET encourage APVG to complete the takeover at $7 - Very low chance of this happening without court proceedings, (as the parties already appear to be adversarial).
2. They negotiate a lower price - Quite possibly an outcome with a realistic chance, (hope directors don't roll over like a fat Labrador and beg for a tummy rub at any price).
3. MET sue for specific performance or damages, VERY high chance of this happening, if either of the above don't happen but as with any court proceedings there are two possible outcomes and this is expensive and time consuming. The wording seems clear enough but case law precedent quite possibly will prevail, whatever that is.
4. One of the other two interested parties who originally expressed interest comes forward with a counter proposal (unlikely in my view)
5. Shareholders end up carrying the baby after a lot of noise and drama (I actually think this is a pretty good chance and am quite relaxed about it).

Plenty of drama to come here.

Good points. I did some reading and I think utilizing the MAC clause is not a get out of jail free card for APVG.
Firstly, AVPG intended to terminate the SIA within 10 business days from the 8th of April. It's been a lot more than 10 business days so we know that for sure it's not going to be terminated with ease as of yet.
So there are several points to consider;

1. The MAC clause states thresholds required to terminate the MAC being either 100M reduction in consolidated NTA, or 10% reduction in underlying net profit using the same accounting methodologies as the Target Group.

MET have indicated that none of these thresholds have been met to their knowledge, and that the thresholds are quite high. Looking at past M&A cases with MAC clauses, it is also to be considered if the impact on performance will persist and be long term.

2. The MAC clause states that the outcome cannot be a result of general economic conditions, or law.

This one speaks for itself and from the information we have been provided, MET is not disproportionately affected compared to industry peers.

From what I'm reading, buyer knowledge also comes into play here and given the coronavirus, it may be considered that AVPG bought into the current market and accepted the potential risk that comes along with that. The transaction was announced in December 30 2019, with Due Dilligence and OIO approval applications following afterwards and a press release from EQT in Jan 22 of 2020. In January and February I don't think it was any secret that Covid-19 was already having an impact on the markets, with the potential to spread even further. This may be a bit of a grey area and is speculation.

It could be argued that even if MET was adversely affected, the general economic condition and law has resulted in the impact on it's financial position and thus the MAC cannot be triggered?

From what I've read, apparently the courts read into MAC clauses narrowly and from what we can see the MAC thresholds have not been triggered. Looking at the information provided by MET and the clauses, wouldn't you think that MET has a good chance of defending such case and more than likely that the takeover would continue as per normal, or potentially with good faith renegotiation? The law is the law and the agreement is an agreement, so I'm curious as to why many think it's more likely for the agreement to fall through? Is there something I'm not understanding - I am aware that it's not clear cut and there is always uncertainty although with all the information we have thus far, doesn't it bode well for MET? Or do some believe MET will meet those thresholds in the near term? and even if they do - the burden of proof is on the buyer, with the financial impact needing to generally impact the business for in the long term, and not a short term hiccup. This can be quite difficult to prove?

[winner69]

There was a real estate guy on the radio this morning saying he doesn’t expect property prices to fall except in tourist hot spots like Queenstown and Rotorua

That’s good news for MET ...realising all that embedded value in full.

[morphs]

There was a real estate guy on the radio this morning saying he doesn’t expect property prices to fall except in tourist hot spots like Queenstown and Rotorua

That’s good news for MET ...realising all that embedded value in full.

Never ask a barber if you need a haircut.

[Beagle]

Buy as many as you are comofrtable holding long term assuming outcome 5 happens is what I have done. If there's some other outcome that migth be worth considering then you'll get the chance to vote on it.

MET appear very confident in their legal position after taking legal advice. I am simply going to accept that some very astute highly experienced senior law partners at a big firm gave that advice and its the safest bet in the world they have a better understanding of commercial law than I do. ;)

[Bjauck]

....2. The MAC clause states that the outcome cannot be a result of general economic conditions, or law.
This one speaks for itself and from the information we have been provided, MET is not disproportionately affected compared to industry peers....

...It could be argued that even if MET was adversely affected, the general economic condition and law has resulted in the impact on it's financial position and thus the MAC cannot be triggered?
...
Excellent post. Perhaps the QCs could argue over whether the impact on MET was as a result of the viral pandemic or general economic conditions or law. If the law and economy had been changed to cope with the virus, then an argument could be made that the virus would have been the prime cause of the deterioration as opposed to "general economic conditions."

[Beagle]

Excellent post. Perhaps the QCs could argue over whether the impact on MET was as a result of the viral pandemic or general economic conditions or law. If the law and economy had been changed to cope with the virus, then an argument could be made that the virus would have been the prime cause of the deterioration as opposed to "general economic conditions."

I think you make a fair point and the outcome of any court case could easily go either way which is why I have only bought what I am happy to hold long term at a price I am comfortable with.

Well worth noting too that Mr market is also saying the outcome of any possible legal action is highly uncertain. Compared to the rest of the sector though, at present this is the cheapest by miles so I see any possible value accretion from this being "in play" as a "free hit".

Further, this has the lowest gearing of the sector by a long way and the highest embedded value per unit of any of the sector so is well placed to continue to generate highly resilient earnings through existing unit sales and will be relatively less affected by the construction shutdown, as demonstrated by their recent profit forecast.

Really a FY20 profit forecast at mid point of $86.5m underlying compared to $90.5m last year is very impressive in the circumstances, especially when other sector players have recently withdrawn their forecast altogether !

[Balance]

As usual, I pick a negotiated outcome before it gets to court.

$6 is my pick of the agreed takeover price.

[dobby41]

There was a real estate guy on the radio this morning saying he doesn’t expect property prices to fall except in tourist hot spots like Queenstown and Rotorua
That was an opinion not a fact.
Most of these people end up wrong.

[stoploss]

Bathurst , have lost their case and all along they said they had strong legal advice that they would win ..... So who knows , SML, MET keeping the lawyers well fed ...
https://www.stuff.co.nz/business/121242796/coal-miner-bathurst-loses-60m-appeal-over-payments-for-west-coast-mine

[Balance]

That was an opinion not a fact.
Most of these people end up wrong.

Real estate agents & used car salesmen - take your pick of who not to trust!

[bottomfeeder]

As usual, I pick a negotiated outcome before it gets to court.

$6 is my pick of the agreed takeover price.

Got my vote as well.

[Benny1]

Should take a look at what ARV or OCA can offer them.
These are the two stars of the listed retirement sector, and OCA is especialy good value as an investment when looked at objectively.

PS: DYOR, Take care & stay safe
I hold shares in both of these. Have tried showing them OCA however they not too keen unfortunately!
My mother really wants somewhere with a swimming pool which I think is abit of a shame that OCA don't have these as these offer really good low impact exercise.

[Beagle]

I hold shares in both of these. Have tried showing them OCA however they not too keen unfortunately!
My mother really wants somewhere with a swimming pool which I think is abit of a shame that OCA don't have these as these offer really good low impact exercise.

Earl Gasparich made it clear at the NZSA presentation a while back that they don't offer a land based "cruise ship" experience and had no intention of doing so. That said the "swimming pool" outside the Sands village is pretty cool. Best to check out what else is missing before signing up for an OCA unit as what they offer at various villages can be quite a bit different to other companies.

[winner69]

Real estate agents & used car salesmen - take your pick of who not to trust!

….and economists and commentators - esp those working for banks

[Cyclical]

Bathurst , have lost their case and all along they said they had strong legal advice that they would win ..... So who knows , SML, MET keeping the lawyers well fed ...
https://www.stuff.co.nz/business/121242796/coal-miner-bathurst-loses-60m-appeal-over-payments-for-west-coast-mine

"Bathurst bought the Escarpment mine on the Denniston Plateau near Westport for $35m with another $40m due when Bathurst had shipped 25,000 tonnes of coal...

The Court of Appeal heard that Bathurst had mined 50,000 tonnes of coal from the mine but Bathurst claimed because it was not shipped overseas it did not count. It had sold the coal to Westport's Holcim cement plant."

The cheek of it. Aussies...

[Cyclical]

As usual, I pick a negotiated outcome before it gets to court.

$6 is my pick of the agreed takeover price.


Got my vote as well.

I wonder how many of us would be happy with that? I think I'd be more accepting of something like $6.50, otherwise would probably rather run with Beagle's option 5. After all, APVG obviously saw value at $7, so why give our assets and all those future profits away to foreign buyers at a discount? There will be a lot of holders out there who bought at $6.50 plus that would be seething if they were offered $6 or less.

I don't know much about APVG but have we considered the possibility that they themselves may have suffered material adverse change and as a result can't easily raise the necessary funds anymore?

[traineeinvestor]

I wonder how many of us would be happy with that? I think I'd be more accepting of something like $6.50, otherwise would probably rather run with Beagle's option 5. After all, APVG obviously saw value at $7, so why give our assets and all those future profits away to foreign buyers at a discount? There will be a lot of holders out there who bought at $6.50 plus that would be seething if they were offered $6 or less.

I don't know much about APVG but have we considered the possibility that they themselves may have suffered material adverse change and as a result can't easily raise the necessary funds anymore?

I have to admit that I'm struggling with the idea of the existing offer being renegotiated at a lower price as it creates a conundrum in that:

(i) if the MAC has not been triggered, does MET's board have the legal right to negotiate a lower price without the approval of shareholders who were entitled to the original offer? Would approval of a renegotiated offer in shareholders' meeting prevent dissenting shareholders bringing a claim against APVG?

(ii) if the MAC has been triggered, why would APVG agree to a lower offer in the current environment unless it was much lower? Would MET have to concede that the MAC has been triggered and, if so, can they bind dissenting shareholders?

And complicating all of these issues is that fact that lurking in the background are some large institutional investors who (I assume) would have crystallised sizeable losses when they closed out their positions. They won't benefit from a revised offer but they do have deep pockets and (probably) individual managers who will be feeling the need to justify their decision to get involved (and to exit when they did). The possibility of investors seeking compensation either from APVG or MET (depending on what is decided by the courts or agreed between APVG and MET) can't be ruled out and that line of thinking makes it difficult for either APVG or MET to concede their position.

Similar issues arise if there is a new offer from a different party – if MET were to receive such an offer how could they recommend proceeding with the new offer without conceding that the original offer had lapsed?

Separately, I haven't seen any involvement from the Takeovers Panel who have regulatory oversight over the process. I'll freely admit to having next to no knowledge of how NZ takeovers are regulated but in HK (where I have a modest amount of relevant experience), the regulator would have been getting hot and sweaty well before now.

Disclosure: held and looking forward to the entertainment.

[macduffy]

Don't forget that if the offer is renegotiated, it still has to be put to shareholders - in the same way that is proposed for the original offer. Shareholders aren't "entitled" to the original offer until the necessary majority vote for it.

[traineeinvestor]

Don't forget that if the offer is renegotiated, it still has to be put to shareholders - in the same way that is proposed for the original offer. Shareholders aren't "entitled" to the original offer until the necessary majority vote for it.

True, but are they not entitled to have the offer put to them to approve so long as the MAC clause is not triggered?

[bottomfeeder]

Its a mess allright, probably why they will settle for damages as well as costs.

[peat]

Similar issues arise if there is a new offer from a different party – if MET were to receive such an offer how could they recommend proceeding with the new offer without conceding that the original offer had lapsed?

It would just be a backup offer contingent on settlement failure of the APVG , so no problem there, damages would still be available.

My problem with this is how long it might take to play it all out. The wheels of justice grind so so slowly.

[Beagle]

I am sure MET directors will be talking to parties who are now the largest shareholders which now includes institutional investors who brought into this as an arbitrage play in the high $6 range. Untimely any possible new deal put to other shareholders will have already had the approval of the bigger shareholders before being put to a vote. :mellow:

[Balance]

I am sure MET directors will be talking to parties who are now the largest shareholders which now includes institutional investors who brought into this as an arbitrage play in the high $6 range. Untimely any possible new deal put to other shareholders will have already had the approval of the bigger shareholders before being put to a vote. :mellow:

If you look at the volume going through and the SPHs filed, the arb players are down to less than 10% by my calculations.

[Beagle]

If you look at the volume going through and the SPHs filed, the arb players are down to less than 10% by my calculations.

Thanks Balance. I think the market has forgotten that if all else fails there's the companies own buy-back which is yet to be executed. https://www.nzx.com/announcements/344571
https://www.nzx.com/announcements/344124 Going through the timeline of notices it seems to me this $30m buy-back never actually started due to the takeover so there's $30m of dry powder right there to be invested in the near future.

There doesn't seem much point to me commencing fresh village developments which will generate development margin's of just 13% (unless this can be significantly improved on with the development model review underway), if you can buy your own shares back and make a 700 / 408 = 71.5% immediate gain !

Maybe a major expansion of scope of the share buy-back is in order if a takeover is not forthcoming ? I for one would be pleased to see them investing each years ~ $90m underlying profit entirely in share buy backs with the share price as this extremely low level. Of course under NZX rules they can't buy back more than 5% of the shares in any one year so 5% of 213.3m shares = 10.67m shares per annum which at the current share price is about half underlying profit. (10.67m shares at $4.08 = $43.5m).

They should buy around $45m of shares back every year until the share price more accurately reflects the NTA, in my opinion.