2 Oct 2020

Metlifecare shareholders vote in favour of takeover bid

3:57 pm on 2 October 2020

Shareholders in retirement village operator Metlifecare have voted overwhelmingly to accept a $1.3 billion takeover bid from a Swedish private equity firm.

Photo of young carer helping the elderly woman

File photo. Photo: 123RF

At a special meeting this afternoon, 90.7 percent of the votes cast supported the $6 a share offer from EQT.

The offer was at the lower end of an independent report that valued Metlifecare at between $5.80 and $6.90 share earlier in the year.

EQT had originally offered $7 a share but then withdrew the offer in May, saying the pandemic had materially changed the company's value and outlook.

The head of EQT Australia and New Zealand, Ken Wong, welcomed the decision by Metlifecare's shareholders.

"EQT looks forward to applying its long-term vision to accelerate Metlifecare's growth and deliver the highest quality care to its residents."

Board split

The takeover split the Metlifecare board, with the chair Kim Ellis coming out against the revised offer, which was driven by the company's largest shareholder, the New Zealand Superannuation Fund, and the majority of directors.

Ellis had wanted to push legal action to force EQT to stick to the original action, or at least force an increased new offer to the valuation midpoint of $6.35 a share.

He had questioned the "fait accompli" process, which had resulted in the lower offer being tabled.

At the special meeting, shareholders peppered Ellis and the rest of the directors with questions as to why it accepted the new terms in the first place.

"The snag was that terms had been placed in front of us kind of on a take it or leave it basis, that put us a in very delicate position that, if we had attempted to renegotiate those core terms then, there was a danger it could slip away and yet we had the majority already saying they were happy with it," Ellis said.

"So we'd be then putting at risk an offer that a majority were keen to vote on... in a favour of a minority who hadn't any chance to consider it at that stage anyway."

The takeover has already been approved by the Overseas Investment Office and needs only High Court approval which is expected before the end of the month.