MET - Metlifecare - one for the fundies?

[Longhaul]

If shareholders don’t vote YES is it all off? Maybe AVG want it to go that way ....their get of jail card maybe?

In the meantime, I have some nice shiny MET shares for sale at a bargain price of $5.90, anyone interested?

[Snow Leopard]

I will admit to being 'mildly disappointed' by the board recommending a $6.zero offer.
I am kind of hopeful that we will get more cents for our shares before this is done and dusted whilst accepting that it could all end in tears.

Meanwhile I will vote against every takeover offer because I do not like loosing companies from the NZX.

My already low opinion of the quality of MET leadership has sunk to a level I would not have possible a few days ago.

[fish]

That’s it fish ....either YES (and AVG get 100%) or NO and (AVG get zilch). The YES if 75% shares vote yes.

If shareholders don’t vote YES is it all off? Maybe AVG want it to go that way ....their get of jail card maybe?

A 75% vote for the scheme out of those voting is a big hurdle-as OGOG found last year in their attempted takeover of NZO .
Personally I find the offer derisory and would need it to be sweetened eg pay out a dividend with imputation credits( I presume some tax has been paid in past year so should be some spare imputation credits )

[Scrunch]

That’s it fish ....either YES (and AVG get 100%) or NO and (AVG get zilch). The YES if 75% shares vote yes.

If shareholders don’t vote YES is it all off? Maybe AVG want it to go that way ....their get of jail card maybe?

Insightful points Winner.

IMO EQT has two objectives here:
-Make money by entering deals at an acceptable entry price. The covid price smash on many companies has increased the world-wide number of candidates that make sense to more seriously consider (meaning a new home can easily be found for EQT's money that would have gone to MET shareholders if this deal doesn't go through)
-Get rid of costs/risks from litigation

That they reoffered $6 indicates that at this price MET is still an attractive deal to them - at that price. There is simply no way of knowing if price points like $6.35 or $6.50 are still acceptable to EQT. If they are, shareholder resistance may result in a higher price appearing.

It may however be that EQT is quite happy to see the deal fall over at $6. This price is the combination of what they actually want to pay and a premium to de-risk the situation around litigation risks. This de-risk has now been achieved, even if the new deal falls over.

As announced with the news release:
"The parties have also agreed to discontinue all litigation and settle all disputes related to the original SIA, with the parties to cover their own costs in relation to the litigation."

[winner69]

In the meantime, I have some nice shiny MET shares for sale at a bargain price of $5.90, anyone interested?

Mine are shinier than yours.

[Scrunch]

A 75% vote for the scheme out of those voting is a big hurdle-as OGOG found last year in their attempted takeover of NZO .
Personally I find the offer derisory and would need it to be sweetened eg pay out a dividend with imputation credits( I presume some tax has been paid in past year so should be some spare imputation credits )

You are highly unlikely to get the imputation element of this wish. Most of the retirement companies are paying very little or no income tax. As per the link below, there were no imputation credits attached to the dividends MET paid across 2017 to 2019.

https://www.nzx.com/instruments/MET/dividends

[winner69]

You are highly unlikely to get the imputation element of this wish. Most of the retirement companies are paying very little or no income tax. As per the link below, there were no imputation credits attached to the dividends MET paid across 2017 to 2019.

https://www.nzx.com/instruments/MET/dividends

Fish ...give up on imputation credits - from Annual Report ...and no tax was paid in H120 either

Imputation credits
The imputation credit balance for the Group at 30 June 2019 is nil (2018: nil). No tax payments were made during the year and dividends paid were unimputed.

Anyway apparently the deal says any divie paid comes off the $6 (So I read on this thread)

[winner69]

So what happens if not enough shareholders vote yes and deal is off?

Scrunch expanded my thinking and EQT probably happy with that happening.

Shareholders left with MET ....probably revert back to trading at a large discount to NTA (is a value destroying company). Not a good long term hold at any price (better options elsewhere) but could be a few decent short term trades if price collapses

Then again there’s always hope that somebody else might be interested in buying them but I’d say that only a mad man would offer $7

Interesting times

[Beagle]

[QUOTE]

Insightful points Winner.

IMO EQT has two objectives here:
-Make money by entering deals at an acceptable entry price. The covid price smash on many companies has increased the world-wide number of candidates that make sense to more seriously consider (meaning a new home can easily be found for EQT's money that would have gone to MET shareholders if this deal doesn't go through)
-Get rid of costs/risks from litigation

That they reoffered $6 indicates that at this price MET is still an attractive deal to them - at that price. There is simply no way of knowing if price points like $6.35 or $6.50 are still acceptable to EQT. If they are, shareholder resistance may result in a higher price appearing.

It may however be that EQT is quite happy to see the deal fall over at $6. This price is the combination of what they actually want to pay and a premium to de-risk the situation around litigation risks. This de-risk has now been achieved, even if the new deal falls over.

As announced with the news release:
"The parties have also agreed to discontinue all litigation and settle all disputes related to the original SIA, with the parties to cover their own costs in relation to the litigation."[/QUOTE]

I have got to say this. Given that on 10 July there was scheduled to be a vote by shareholders on whether to take legal action against APVG to enforce the original scheme of arrangement at $7, the directors without seeking a vote decided to waive this action and accept a revised scheme at $6, thereby waiving any chance of enforcing the original $7 deal and shareholders rights to sue for that price...to me that would seem to be an egregious breech of shareholders rights. I think the directors have skated on very thin ice with their unilateral decision to waive shareholders rights in respect of the $7 offer and this is quite probably an actionable matter. It may be unfortunate timing for the directors that they entered into the new scheme implementation agreement at $6 on exactly the same day the vote was to occur on the legal enforcement action on the $7 deal.

The question of undue influence must surely also be asked. The N.Z. super fund has a director on the board and it was clear they wanted out rather than litigating this thing. Did that director having such a clear objective influence the other directors apart from Kim Ellis ?

Finally this question must also be asked, what do the majority of directors know about the assets of MET and its near term prospects that shareholders apparently don't know such that they would accept an offer $1 lower than reported NTA as at 31 December 2019 and no dividends for more than a year ?
I cannot recall seeing weakness displayed at this low level before from any board. What on earth are they thinking ?

There is some serious barking to be done at the forthcoming shareholder meeting.

[Poet]

A couple of points that I think need clarifying (I hope I have these right)

Firstly, I would imagine that the dropping of the current legal action will be contingent on 75% of the shareholders ratifying the new Scheme of Arrangement. So there isn't a scenario where the new scheme gets voted down and the Swedes walk away scott free - the MET board (the new board presumably) can still proceed to enforce the original $7

Also, the swedes are also going to reap an unexpected, and quite significant bonus in the new deal (and one which hasn't been mentioned anywhere as far as I can see) and that is the ability for them to retain all of MET's existing carried forward tax losses so that these can be used to offset future taxable profits (should there be any taxable profits in the future) - I wonder what that is worth to them. This due to a pending IRD rule change.
https://www.ird.govt.nz/covid-19/lat...ntinuity-rules
All in all a right doing over of the MET shareholders in my opinion