8 Oct 2020

Shareholder attempts to halt Metlifecare takeover

2:54 pm on 8 October 2020

A shareholder in retirement village operator Metlifecare is making a last minute attempt to upset its takeover.

Photo of young carer helping the elderly woman

File photo. Photo: 123RF

An unnamed investor has lodged an objection to the company's application for High Court approval of the proposal, which is needed for the takeover to be completed.

Metlifecare has confirmed that an objection has been lodged.

"Metlifecare is considering the notice of opposition and will provide further market updates on the scheme process as are appropriate. Shareholders do not need to take any further action at this stage," the company said in statement to the stock exchange.

Shareholders overwhelmingly approved the $6 a share offer from Swedish investment firm EQT at a meeting last week.

Metlifecare said it was still preparing for the High Court hearing, scheduled for 15 October.

One of the steps necessary for the High Court hearing is a letter from the Takeovers Panel that it has no objection to the takeover.

Takeover division

The proposed takeover by EQT has been controversial since the firm pulled out of an original $7 a share offer shortly after the pandemic hit, claiming that the earnings and value of Metlifecare would be materially affected by the effects of Covid-19.

Metlifecare then looked at taking legal action to force the Swedes to carry on with the proposal.

EQT then returned with a revised offer of $6 a share, which was at the lower end of a valuation range in an independent report.

A majority of Metlifecare's board backed the deal and recommended shareholders accept, although board chair, Kim Ellis, opposed it saying it undervalued the company.

He said the company's biggest shareholder, the NZ Super Fund, effectively engineered a "fait-accompli" for the takeover at the lower price.

At last week's meeting Ellis was joined by the Shareholders Association and Salt Funds Management in voting against the offer.

Get the RNZ app

for ad-free news and current affairs