MET - Metlifecare - one for the fundies?

[NOCASH]

No errors - just Beagle and afew others getting in before it goes to $6.25 and then $6.50 and then $7.00 before it becomes all official

Thanks, I thought it was Jarden staffs spreading the news around the office and to there close friends, mum and dad to buy buy MET, early XMAS Surprise!

[Beagle]

Thanks, I thought it was Jarden staffs spreading the news around the office and to there close friends, mum and dad to buy buy MET, early XMAS Surprise!

Brokers never do that
I emailed Julian Cook today and asked if it was Summerset. I think its a very safe bet he won't reply due to confidentiality agreements so the real reason I emailed him was to tell him I thought it was a great idea and the synergies would be quite significant. Sometimes CEO's like a bit of encouragement from shareholders...it can be a bit lonely at the top and an encouraging yap is probably something I think he would like. I look forward to congratulating him at the next annual Summerset meeting.
Might even be able to entice Winner along to that one as it will be more fun than normal.

[winner69]

Brokers never do that
I emailed Julian Cook today and asked if it was Summerset. I think its a very safe bet he won't reply due to confidentiality agreements so the real reason I emailed him was to tell him I thought it was a great idea and the synergies would be quite significant. Sometimes CEO's like a bit of encouragement from shareholders...it can be a bit lonely at the top and an encouraging yap is probably something I think he would like. I look forward to congratulating him at the next annual Summerset meeting.
Might even be able to entice Winner along to that one as it will be more fun than normal.

Hope you and Julian have read 'The Synergy Trap' by Mark Sirower

Warns about the 'precise' synergies implicitly embedded in acquisition premiums and that at the end of the day they are often not captured.

And you would like this warning - beware of seductiveness and danger of sophisticated valuation models so often used by advisers.....probbly Jardens will come up with the answer their customer wants but I wonder what Julins model says what he can pay if really keen ...bugger, forgot 'synergies' are the balancing factor.

[couta1]

Beagles barking was hurting my ears so much I put an order in to buy some and got a partial fill near close, see what tomorrow brings.

[RupertBear]

[QUOTE=Beagle;779721]A few observations.
1. FCNZ, (now Jarden) were the original house that floated the idea of a SUM - MET merger.
2. Jarden without question have the best analysts and investment bankers in N.Z.
3. This is obviously being taken very seriously and I would expect the various working groups comprise, (among other things) experts looking at the value of the synergies.
4. Complex deals at fair value take quite a lot of time and application of expert talent and I for one am pleased they are taking their time to look at this in a diligent and thorough manner.
5. I would think its now more likely than not that something will come out of this as if the indicative non binding terms were woefully inadequate the proposal would have been kicked to the curb already.
6. Forward underlying PE by my estimate for MET is just 11.7 @ $5.80, the cheapest in the sector. Considering the stock is obviously in play I am a little surprised we're not a bit over $6 already.
If you haven't already got SUM-MET I don't think its too late.[/QUOTE]

“Beagles barking was hurting my ears so much I put an order in to buy”

Yep the barking got to me too Couta and I bought some at $5.80. Guess it never hurts to be rounded up by a Beagle eh

[winner69]

If an acquirer like Summerset reckon there’s say $20m of ‘synergies’ there’s always debate as to who the value of these synergies ‘belong’ to. Capitalised over many years quite a sum.

Should Metlifecare shareholders expect to get ‘paid’ for them or should Summerset as the acquirer expect to benefit (in theory) into the future seeing they are taking on the risk......or maybe sort of shared out.

[peat]

Considering the stock is obviously in play I am a little surprised we're not a bit over $6 already.
If you haven't already got SUM-MET I don't think its too late.

you are a bit spooky mate.

[Baa_Baa]

If an acquirer like Summerset reckon there’s say $20m of ‘synergies’ there’s always debate as to who the value of these synergies ‘belong’ to. Capitalised over many years quite a sum.

Should Metlifecare shareholders expect to get ‘paid’ for them or should Summerset as the acquirer expect to benefit (in theory) into the future seeing they are taking on the risk......or maybe sort of shared out.

Until it's clear who the potential acquirer is, it's just speculation - interesting but academic - until the bidder shows its hand. Beagle laid out a very clear and long list of reasons why MET was a very poor investment some time ago, before he changed his mind and decided it was the best opportunity in the sector. Those reasons though haven't completely gone away, far from it, it's just that they're not talked about anymore, or are muted in the currently enamoured commentary.

Any acquirer will naturally balance the upside sector opportunity against the inherent issues MET have to deal with, to discount the bid price somewhere around NTA plus a small bonus for investors to get them over the line. It's almost like mana from heaven for shareholders that MET have struggled so badly for such a long time that they'll consider any lifeline from an acquirer to ease their suffering.

None of that discounts the market opportunity speculating on buying a share at lows and flicking it into a rising euphoria. The market and the company aren't as closely correlated lately as they have been for quite a long time.

[Beagle]

Beagles barking was hurting my ears so much I put an order in to buy some and got a partial fill near close, see what tomorrow brings.

The barking was nice and clear at $4.40 ! Better late than never to a good party though so welcome aboard to you and the hungry little bear. I bought more this morning myself at $5.80 so clearly I think there's plenty of juice left in this deal.

If an acquirer like Summerset reckon there’s say $20m of ‘synergies’ there’s always debate as to who the value of these synergies ‘belong’ to. Capitalised over many years quite a sum.

Should Metlifecare shareholders expect to get ‘paid’ for them or should Summerset as the acquirer expect to benefit (in theory) into the future seeing they are taking on the risk......or maybe sort of shared out.

Like buying a house with potential isn't it mate. The buyer who does the work to crystalize the potential deserves the reward and that's why I think NTA of $7 or only a very slight premium over that, should be enough to carry the day.

[Beagle]

Until it's clear who the potential acquirer is, it's just speculation - interesting but academic - until the bidder shows its hand. Beagle laid out a very clear and long list of reasons why MET was a very poor investment some time ago, before he changed his mind and decided it was the best opportunity in the sector. Those reasons though haven't completely gone away, far from it, it's just that they're not talked about anymore, or are muted in the currently enamoured commentary.

Any acquirer will naturally balance the upside sector opportunity against the inherent issues MET have to deal with, to discount the bid price somewhere around NTA plus a small bonus for investors to get them over the line. It's almost like mana from heaven for shareholders that MET have struggled so badly for such a long time that they'll consider any lifeline from an acquirer to ease their suffering.

None of that discounts the market opportunity speculating on buying a share at lows and flicking it into a rising euphoria. The market and the company aren't as closely correlated lately as they have been for quite a long time.

To be fair I was right and the share price has been a great disappointment until quite recently. Its clear in recent months the Auckland market has turned a corner and even a cursory look at the chart showed quite clearly a fairly solid base in the share price had been built over several months. Once it broke out above the 100 day MA evidence was emerging that the Auckland market is recovering from a long malaise and the outlook had changed. I bought at that point and clearly articulated why immediately after buying, you can't ask for or expect more than that !

Nobody is pretending remedial actions for weathertightness have suddenly disappeared and I have made that point several times about what their program is and likely cost but it has already been fully provisioned to arrive at NTA of $6.96 as at 30 June 2019. I think it would be a fair bet to suggest that one of the working groups will be looking into this and tasked with reviewing where these works are at and whether provisioning already accounted for is enough to complete the job.

I also made the point they are certainly not the only listed operator with weathertightness issues on some of their buildings, its just that the others tend to keep a lot quieter about them.

I agree with you on only a small bonus above NTA being apprpriate. $7.25 should be enough to get this over the line.

you are a bit spooky mate.