MET - Metlifecare - one for the fundies?

[Beagle]

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

Auckland house prices look surprisingly strong https://www.landlords.co.nz/article/...ay+3+June+2020
https://www.stuff.co.nz/life-style/h...nomic-downturn

Barfoots reporting Auckland medium house sale price up 1.6% in May 2020 on April 2020 and 7.5% on May 2019. https://www.nzherald.co.nz/business/...ectid=12336753

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

[winner69]

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

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

[macduffy]

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

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

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

[Bjauck]

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

Maybe the classic tactic of exaggerating other interest, to squeeze more dough out of the one party that was actually seriously interested.

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

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

[850man]

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

[Cyclical]

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

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

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

[Beagle]

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

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

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

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

[bottomfeeder]

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

[Beagle]

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

You obviously didn't read the last part of the Judge's ruling the other day. http://nzx-prod-s7fsd7f98s.s3-websit...049/323728.pdf
See point 38. MET lost this round...I read that as MET is liable for a chunk of APVG's costs...but I am not a lawyer and not pretending to be one so that's yet another question for the forthcoming shareholder meeting. How much might MET be up for in terms of APVG's legal costs if they lose ?

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

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

[bottomfeeder]

You obviously didn't read the last part of the Judge's ruling the other day. http://nzx-prod-s7fsd7f98s.s3-websit...049/323728.pdf
See point 38. MET lost this round...I read that as MET is liable for a chunk of APVG's costs...but I am not a lawyer and not pretending to be one so that's yet another question for the forthcoming shareholder meeting. How much might MET be up for in terms of APVG's legal costs if they lose ?

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

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

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