MET - Metlifecare - one for the fundies?

[peat]

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

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

[Beagle]

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

[dubya]

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

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

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

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

What am I missing? Comments would be appreciated.

[peat]

a well performing retirement company.

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

[Balance]

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

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

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

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

What am I missing? Comments would be appreciated.

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

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

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

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

[trader_jackson]

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

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

In other words, takeover is off imo.

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

[Balance]

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

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

[Bjauck]

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

I agree very unfortunate. Small shareholders would have acted or not acted on their previous statement. Should they have said nothing previously as it was still an evolving situation?

[JohnnyTheHorse]

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

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

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

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

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

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

[trader_jackson]

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

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