MET - Metlifecare - one for the fundies?

**Scrunch** · 19-12-2019, 08:39 AM

Originally Posted by Balance

Top 3 'active' shareholders being NZ Super, ACC and ISG Ltd own 32% so it is inconceivable that the Board & bidder do not interact with them.

Means that they are bound by confidentiality and cannot trade any shares until such time as the deal is confirmed on or off.

Add on ANZ Bank various investment funds' 11.8% and the top 4 shareholders will deliver control if they like the price offered by the bidder.

I wouldn't be surprised if they has signed conditional sale agreements with one or several big shareholders . It would help explain the longer elapsed time with no announcements.

**winner69** · 19-12-2019, 08:42 AM

Originally Posted by Balance

Top 3 'active' shareholders being NZ Super, ACC and ISG Ltd own 32% so it is inconceivable that the Board & bidder do not interact with them.

Means that they are bound by confidentiality and cannot trade any shares until such time as the deal is confirmed on or off.

Add on ANZ Bank various investment funds' 11.8% and the top 4 shareholders will deliver control if they like the price offered by the bidder.

....so me, Couts, beagle et al won’t be the ones who decide

We just spectators eh ...hoping for a successful punt

**Beagle** · 19-12-2019, 08:44 AM

Originally Posted by Balance

Top 3 'active' shareholders being NZ Super, ACC and ISG Ltd own 32% so it is inconceivable that the Board & bidder do not interact with them.

Means that they are bound by confidentiality and cannot trade any shares until such time as the deal is confirmed on or off.

Add on ANZ Bank various investment funds' 11.8% and the top 4 shareholders will deliver control if they like the price offered by the bidder.

Thanks for the info Balance. Under the takeovers code as I am sure most will know already, if they bid for more than 20% they have to bid for the lot. I estimate NTA as at 31 December 2019 to be about 2-4% above the $6.96 figure as at 30 June 2019.
The $64,000 question for shareholders to ponder is have management done enough over the last 2-3 years to justify a bid above NTA ?
If you're tempted to answer no like I am then consider whether the Auckland market is what's been holding them back and now that the tide appears to be coming in again with regard to Auckland property, whether a premium is justified based on how well the management have done in a falling Auckland market in the last 2-3 years.

These are difficult questions but I can't help but refer back to my 5 year analysis which showed average growth in underlying profit across 2 stages of the property cycle of 15% per annum, better than RYM's underlying profit growth over the same period.

For me, RYM is the benchmark and given MET's heavy concentration of property in Auckland and the Bay of Plenty, compared to RYM's much greater geographical spread I think on any rational and objective analysis MET's management have beaten RYM which is the benchmark so must be considered to have done well.

With the outlook for Auckland property now looking brighter and MET morphing its business model to move more towards a more comprehensive care model, I don't think any bid at a discount to NTA is warranted.

OCA in the sector is now trading at a premium to last recorded NTA of just over 16%, (does not have the 5 year established track record of underlying profit growth) and the rest as everyone knows are trading at much greater premiums to NTA.

It must be at least at NTA as at 31 December 2019, so about $7.20 as an absolute minimum.

**winner69** · 19-12-2019, 08:49 AM

Originally Posted by Beagle

Thanks for the info Balance. Under the takeovers code as I am sure most will know already, if they bid for more than 20% they have to bid for the lot. I estimate NTA as at 31 December 2019 to be about 2-4% above the $6.96 figure as at 30 June 2019.
The $64,000 question for shareholders to ponder is have management done enough over the last 2-3 years to justify a bid above NTA ?

The answer to the $6.40 question is obviously NO

I think you have answered that question many times over the last month or so

**Beagle** · 19-12-2019, 09:00 AM

For a second there I thought the bid had been announced at $6.40 lol, The barking would be fierce lol
They've done enough so no discount to NTA could be considered as being fair and reasonable.

**Balance** · 19-12-2019, 09:24 AM

Originally Posted by Beagle

Thanks for the info Balance. Under the takeovers code as I am sure most will know already, if they bid for more than 20% they have to bid for the lot. I estimate NTA as at 31 December 2019 to be about 2-4% above the $6.96 figure as at 30 June 2019.
The $64,000 question for shareholders to ponder is have management done enough over the last 2-3 years to justify a bid above NTA ?
It must be at least at NTA as at 31 December 2019, so about $7.20 as an absolute minimum.

If it is indeed a private equity bidder, then they are not buying MET for what it is and certainly, they will be bringing in their own management team while retaining some of the existing team if appropriate.

And knowing private equity modus operandi, it will be a case of using MET to facilitate more investments in the sector with the view to resisting it or selling it in future.

So I think that management of MET will be resisting this takeover while Chairman Ellis with his 250,000 shares will be wanting a high price.

**winner69** · 19-12-2019, 09:35 AM

Originally Posted by Beagle

For a second there I thought the bid had been announced at $6.40 lol, The barking would be fierce lol
They've done enough so no discount to NTA could be considered as being fair and reasonable.

If they have done enough to deserve that praise why has the share price languished in the $5's

Let's hope somebody thinks it's worth a punt at 7 bucks plus

**Beagle** · 19-12-2019, 09:43 AM

Sentiment against Auckland property has been quite sour up until quite recently but the worm has definitely turned so its onwards and upwards from here regardless of what happens with this possible takeover

Important to note that before sentiment turned sour against Auckland property the MET shares were in a nice uptrend and the price was $6.50 and that's without any takeover premium ! METCHART.jpg (Note the price in October 2018 !)