The chair of the retirement village operator Metlifecare does not want shareholders to accept a new takeover offer, saying it is not a fair deal.
The deal on the table is a revised offer of $6 a share from Asia Pacific Village Group (APVG), backed by the Swedish private equity firm EQT.
APVG initially offered $7 a share for the company, but wanted to pull out in April saying the Covid-19 pandemic had materially impacted Metlifecare's assets, earnings, and profits.
Metlifecare denied this, and was prepared to enforce the $1.5 billion deal through court action.
The new deal - worth $1.3 billion - came ahead of a shareholder vote on whether to pursue the litigation.
The board met this afternoon to discussion the new offer and in an update to the market chair Kim Ellis said he did not recommend shareholders vote in favour of the scheme.
"Mr Ellis feels strongly that shareholders should be given the opportunity to vote on the scheme. However, he believes the scheme consideration... does not represent fair value and should be at least at the mid-point of the range determined by independent adviser KordaMentha at NZ$6.35," the update said.
"He notes that the indications of majority shareholder support for the scheme reduced the prospect of negotiating a higher price."
Metlifecare's biggest shareholder, the NZ Super Fund, wanted the deal to go ahead.
The new offer requires the prospect of legal action to do with the original deal, be dropped with both parties covering their own costs.
EQT managing director Ken Wong said it was glad to have the support of NZ Super.
"Metlifecare's growth pipeline will be accelerated by EQT's support and investment horizon that looks beyond the current environment.
"EQT would also like to acknowledge the incredible efforts of all of Metlifecare's staff in keeping the residents of Metlifecare's villages safe and healthy during this extraordinary period."
Shareholders would vote on the offer in September, and if approved, subject to Overseas Investment Office and High Court approval, would be implemented the following month.