MET - Metlifecare - one for the fundies?

[Beagle]

https://www.nzherald.co.nz/business/...ectid=12327909

It looks highly adversarial to me. Break fee is $14.91m incl GST which is meant to represent each parties costs in this matter.
My view is it could easily cost them double that again if they try and litigate this so perhaps $45m all up incl GST ($39m ex GST) which is 18.3 cps, (call it 20 cents).

My re-read of the scheme implementation agreement does not give me any comfort that any deposit has been paid.

As I said last week, it is best to only buy the amount of shares at the price you are prepared to pay as a long term investment assuming the takeover doesn't happen.
Updated, assume they burn 20 cents per value in litigation in this failed takeover and real estate falls 7.5%, (average of economists expectations).

This all sheets me back to just on $6.

[Ace]

I agree. Claiming the wage subsidy which required a 30% projected drop in revenue for a period and then claiming revenue is more or less the same within a 10% tolerance doesn’t look good. Granted the 30% drop could be for a month period as far as I’m aware. So which one is it? Every other point I’d say MET seems correct.

[Beagle]

Total wage subsidy claimed across all 26 subsidiary companies was $7.1m

This thing really is a cluster @#%&. Long term they will be fine but what a mess this takeover is.

[see weed]

Just my thoughts. How many 2WW vets in these homes? APVGL (BIDCO) EQT sold there 19% odd holding on ANZAC observed holiday 27/4/20? Property vals. drop? Maybe they were only buying in to close it down and have all that nice prime real estate to develope and sell to private home buyers? Maybe it was a good thing that deal fell through for the sake of the residence? Maybe I am barking up the wrong tree? Who knows?

[sb9]

Total wage subsidy claimed across all 26 subsidiary companies was $7.1m

This thing really is a cluster @#%&. Long term they will be fine but what a mess this takeover is.

If I'm a holder with bit of safety margin, I would get out and watch the drama from sidelines...

[dabsman]

You only need to show revenue drop by 30% in one month. Surely all the deferred sales in April (i.e. contracted but unable to settle) would show a 30% reduction in revenue?

[winner69]

Just my thoughts. How many 2WW vets in these homes? APVGL (BIDCO) EQT sold there 19% odd holding on ANZAC observed holiday 27/4/20? Property vals. drop? Maybe they were only buying in to close it down and have all that nice prime real estate to develope and sell to private home buyers? Maybe it was a good thing that deal fell through for the sake of the residence? Maybe I am barking up the wrong tree? Who knows?

Seeweed ...bidco didn’t have (m)any to sell ...that notice is about the Super Funds shares (pledged to vote yes)

[Beagle]

You only need to show revenue drop by 30% in one month. Surely all the deferred sales in April (i.e. contracted but unable to settle) would show a 30% reduction in revenue?

That's my read on it too. I don't think there's anything illegal about claiming the wage subsidy. Quite probably disingenuous of EQT to claim that there is. I note in the various documents released to the NZX today MET took legal advice on their eligibility.

[Ace]

That's my read on it too. I don't think there's anything illegal about claiming the wage subsidy. Quite probably disingenuous of EQT to claim that there is. I note in the various documents released to the NZX today MET took legal advice on their eligibility.

Yeah I don’t think there’s anything wrong with it either although I think EQT will use that if MET claimed and required the wage subsidy then it implies that their business is materially impacted financially and without the subsidy -7.1m would be enough for the underlying business to trigger MAC, and surely this will have a material impact in the future right? The saving grace is that the impact is due to general economic conditions and law.

EDIT: and as you say they have legal advice from an experienced team so I’m sure it’s all taken care of! Other thing is though, EQT might have the same haha.

[Longhaul]

That's my read on it too. I don't think there's anything illegal about claiming the wage subsidy. Quite probably disingenuous of EQT to claim that there is. I note in the various documents released to the NZX today MET took legal advice on their eligibility.

It would seem impossible that MET didn't suffer a 30% drop in revenue for the month, and that they would have applied for the subsidy without legal advice. This issue is a it of a red herring IMHO.

The key argument that the courts will have to decide is whether COVID-19 is the cause of the MAC.

Flipping a coin might give us the most informed answer at the moment.