MET - Metlifecare - one for the fundies?

[mp52]

Not only revenue down but significant additional operating costs to rest homes bought on by the lockdown including cover/overtime for potentially sick staff, additional gate security, technology purchases to facilitate family contact with residents etc. As these are all measures to provide a high margin of safety for the most at risk group in the pop I can’t see the govt having an issue with the subsidy.

[King1212]

Uh..... people sold...can see all the negatives coming...

Bring in bull....to stir up more. ..we need a boil up!

[Bjauck]

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.

Yes I agree. I think the case may turn on whether the "change in law" can be triggered as a successful "carve out" under the MAC clause. Are the consequences for MET as a result of the epidemic or the "change in law?"

Obviously the change in law was brought about in responding to the epidemic. Also, if there had been no change in law, the result of the epidemic may have brought about even greater adverse consequences for MET. As there would have been material adverse consequences for MET, whether or not there had been changes in law, does that mean that the epidemic was the actual cause of the MAC?

So are the circumstances that brought about the "change in law" legally relevant in enforcing the scheme of arrangement?

[peat]

Also, if there had been no change in law, the result of the epidemic may have brought about even greater adverse consequences for MET. As there would have been material adverse consequences for MET, whether or not there had been changes in law, does that mean that the epidemic was the actual cause of the MAC?

Ya cant argue that line - ifs and maybe's and would haves are irrelevant. No one knows what might happen


Its funny I reckon because anyone drafting a MAC would almost certainly wish and intend to cover an event like this because asset prices in general have dropped - we all know that from our portfolios (except Beagle).
And yet its not at all clear that this event is covered , so the offeror (now withdrawing) did a real poor job of writing the SIA MAC clause. I wonder if its the same legal firm now arguing on their behalf and this of course implies vested interest in their position which means they may not truly believe it but be forced to argue it otherwise it reflects poorly on them. ANyone know if its the same firm?

So are the circumstances that brought about the "change in law" legally relevant in enforcing the scheme of arrangement?

Do we go down the proximate cause root on the legal argument as per standard insurance? . Its usually the closest cause in that case which in my book points to the law change

[Bjauck]

Maybe it is relevant that a “state of national emergency” was declared. Is that actually a “change of law” or actually just working within the existing legal framework to combat the emergency as necessary. The cause of the emergency and/or the previously legally countenanced declaration of emergency powers then being proximate cause?

So the use of the emergency powers would neither be “general economic conditions” nor a change of law, as the ability to use emergency powers had previously been part of the NZ constitutional and legal system. The agreement could then be avoided as neither of these two carve outs from the MAC would apply.

[Longhaul]

I'm sure I'm not alone here, but why does MET persistently trade below NTA by such a wide margin (currently at 59% of NTA)?

I wish I had some insight into the decision making of those who keep the price where it is. It baffles me why anyone would sell, unless they had no other option.

If I was sniffing around as a potential buyer, it would be in my interest to keep the price as low as possible. Does anyone else think this is what's happening here?

[Cyclical]

DISC: Holding for long term (mid 3's buyer with more buy orders @ $3.8 and lower)

Just dropped 2 thirds of my holding to bank the profit while I still have one. Doubtless long term this one has potential, but not sure I've got the patience for a long drawn out, costly and likely ugly legal battle hampering the company's direction when there may well be other bargains coming up, so elected to free up some powder. Like you Ecks, if it gets back to $3.80 or something, I'll probably load up again. As it stands, it still makes up a good chunk of my portfolio.

[Ace]

Maybe it is relevant that a “state of national emergency” was declared. Is that actually a “change of law” or actually just working within the existing legal framework to combat the emergency as necessary. The cause of the emergency and/or the previously legally countenanced declaration of emergency powers then being proximate cause?

So the use of the emergency powers would neither be “general economic conditions” nor a change of law, as the ability to use emergency powers had previously been part of the NZ constitutional and legal system. The agreement could then be avoided as neither of these two carve outs from the MAC would apply.

I think we are reading into it too much. Generally a change in law is secondary to a circumstance anyway. If going by that logic a change in law can always easily be used as a scapegoat to trigger a MAC by looking at what caused the change in law. End of the day regardless of how, the law was changed and I’d think that’s what it comes down to.

As far as I’m aware and to my limited knowledge, the covid laws are new? And even the alert level system and its implications.

[Longhaul]

As far as I’m aware and to my limited knowledge, the covid laws are new? And even the alert level system and its implications.

It looks like it - COVID-19 Response (Urgent Management Measures) Legislation Bill

[macduffy]

I'm sure I'm not alone here, but why does MET persistently trade below NTA by such a wide margin (currently at 59% of NTA)?

I wish I had some insight into the decision making of those who keep the price where it is. It baffles me why anyone would sell, unless they had no other option.

If I was sniffing around as a potential buyer, it would be in my interest to keep the price as low as possible. Does anyone else think this is what's happening here?

That question has intrigued investors for longer than many of us can remember. The usual answer has been the perceived lower quality of some of their buildings, coupled with "leaky building" issues. I doubt that there has been a long term intention to keep the price low.