MET - Metlifecare - one for the fundies?

[Beagle]

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

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." This is part and parcel of the new scheme implementation agreement and looks like a comprehensive waiver of all rights in respect of the original scheme implementation agreement to me so I think you have your first point wrong and as I stated above MET directors have unilaterally given away shareholders rights to sue for $7 in exchange for this low-ball new scheme implementation agreement. Kim Ellis, you, me and others are right, this is not a fair deal.

In terms of the proposed loss carry forward changes it would appear the thrust of this emerging proposal is that its aimed at companies raising capital due to Covid 19 effects and hopefully not applicable in a takeover situation like this.

I intend to vote and advocate strongly against this egregiously inadequate deal.

[Longhaul]

Mine are shinier than yours.

What is it they say about polishing turds?

[Baa_Baa]

Do the Top 10 shareholders hold enough to reach or exceed the 75% vote for takeover at $6.00?

Well, yes and no. Yes they do collectively hold 82%, but no because most of them are nominee companies, so they will have to canvass their customer shareholders to determine which say YES sell, or NO don't sell.

Metlifecare Top 10 Shareholders - Companies Office 11/7/20
Shares on issue	213,304,722
	Shares	%
HSBC NOMINEES (NEW ZEALAND) LIMITED	57,942,710	27.16%
NEW ZEALAND SUPERANNUATION FUND NOMINEES LIMITED	42,363,688	19.86%
JPMORGAN CHASE BANK, N.A.	24,966,057	11.70%
CITIBANK NOMINEES (NEW ZEALAND) LIMITED	24,366,705	11.42%
HSBC NOMINEES (NEW ZEALAND) LIMITED	9,743,548	4.57%
ACCIDENT COMPENSATION CORPORATION	6,449,454	3.02%
JBWERE (NZ) NOMINEES LIMITED	3,701,551	1.74%
FNZ CUSTODIANS LIMITED	2,295,969	1.08%
NEW ZEALAND DEPOSITORY NOMINEE LIMITED	2,017,791	0.95%
FORSYTH BARR CUSTODIANS LIMITED	1,872,588	0.88%
	175,720,061	82.38%

[Snoopy]

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.

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 ?

What you might be missing is that the property market is holding up due to pent up demand from the lockdown, generous wage subsidies from the government making people feel secure, removal of debt to equity ratios by the government on bank loans and the perception of very poor and or irregular returns on alternative investments: All time lows in fixed interest, many dividends being cancelled and the sharemarket having a big shock in capital terms.

What many of these subsidised and shocked property market buyers do not realise is that come September, there is going to be large reduction is free cash available to chase their property dreams. The government has achieved their aim of stopping a property market collapse, for now. But looking just a little bit further out, I would suggest, that he property market will likely come under pressure. And it is that future reduction in property values that the bidders for MET are worried about.

SNOOPY

[Leftfield]

What you might be missing is that the property market is holding up due to pent up demand from the lockdown, generous wage subsidies from the government making people feel secure, removal of debt to equity ratios by the government on bank loans and the perception of very poor and or irregular returns on alternative investments: All time lows in fixed interest, many dividends being cancelled and the sharemarket having a big shock in capital terms...
SNOOPY

You seem to ignore a possible key factor in recent high real estate prices ( at least in my region) is the impact of wealthy Kiwi's returning home.....(just saying)

[Joshuatree]

Often management are given inducements for accepting a bid all legit but we dont know what the golden parachutes will be will we?

[pierre]

I bought in at 430. I think I'll take 584 now rather than agonise over whether or not we might get another 50c per share. If I invest the proceeds in OCA only need a gain of 9cps to equal 635 in MET. I think it's much more certain and likely to occur faster.

[Leftfield]

I bought in at 430. I think I'll take 584 now rather than agonise over whether or not we might get another 50c per share. If I invest the proceeds in OCA only need a gain of 9cps to equal 635 in MET. I think it's much more certain and likely to occur faster.

Not silly..... It's all about % gains and doing the best with your capital.

While a lot of eyes have been on MET (well done holders) there have been some impressive/better % gains in some small caps such as PLX, PEB etc.

This chart compares gains in MET (in Blue) v PLX (in red).

MET v PLX 6 mnths.jpg

[allfromacell]

I bought in at 430. I think I'll take 584 now rather than agonise over whether or not we might get another 50c per share. If I invest the proceeds in OCA only need a gain of 9cps to equal 635 in MET. I think it's much more certain and likely to occur faster.

But then there's always the chance OCA underwhelms especially on cost increases as they've done before (or COVID comes back). At least holding out for the $6 is an almost guaranteed gain and still allows one to sell MET and pick-up OCA if they fall to the downside on an underwhelming result (if one still wants to buy).

Personally I already have far too many OCA from backing up the truck during the COVID dive, so although I like the company I don't feel comfortable buying more. Think I'll sit of the MET shares and see what opportunities arise between now and October which might justify selling early.

[bottomfeeder]

The value MET is better in the medium term, say three to four years. My concern with the economy, is super inflation and the coming depression. MET is well placed to benefit in a number of ways. They are a property company that relies to a lesser extent on incomes. If the tsunami of older people dont have the income to pay levies, they can be recovered at the end of the road from the capital. A sort of senior deferred loan. Why do we think the sweedish are buying in. Because there is real value going forward. I would much rather sacrifice this short term gain and vote against the takeover. It might come down to a small number of votes, particularly if one of the largest holders vote against. This will be interesting.