NZX-listed retirement village developer & operator Metlifecare Ltd said yesterday it’s received a $6.50/share non-binding offer from a still-unnamed party, and has now received 2 more unsolicited expressions of interest.
But Metlifecare chair Kim Ellis said the $6.50 offer, which followed completion of due diligence, was well short of the value range Metlifecare’s own board has received from several analyses.
“Depending on the assumptions adopted, the valuation ranges to in excess of $8/share. Following confidential institutional soundings, a binding offer at $6.50/share is unlikely to be supported by the requisite majority of shareholders voting. In particular, the Accident Compensation Corp (5.5% shareholding as of July), Nikko Asset Management NZ Ltd & Generate Kiwisaver Public Trust Nominees Ltd (3%) have advised they would vote against such an offer,” Mr Ellis said.
This from a company which canned a share buyback programme because of the unnamed party’s offer.
As I wrote on 26 November: The share price was $4.82 on 31 October, $4.87 on 8 November and rose to $5.12 on 12 November. From $5.08 on 19 November, the price rose to $5.73 the next day, and was at $5.80 from 21 November – a 20% gain in 3 weeks.
Yesterday, the shares closed at $6.12. The company puts its net asset backing at $6.96/share.
Mr Ellis said yesterday the unnamed buyer had provided a draft scheme implementation agreement. The other 2 offers weren’t as developed.
“In parallel, Metlifecare & its board has undertaken significant analysis, including updating its internal valuation model, considering advice from Jarden Ltd & Simmons Corporate Finance Ltd and legal advice from Chapman Tripp.
“After careful consideration, the Metlifecare board has formed a view that the value/share of the company is above the price of the revised non-binding indicative offer. The valuation of the company is particularly sensitive to house price inflation & construction cost inflation.
“Depending on the assumptions adopted, the valuation ranges to in excess of $8/share. Following confidential institutional soundings, a binding offer at $6.50/share is unlikely to be supported by the requisite majority of shareholders voting.”
26 November 2019: Metlifecare appoints offer advisor, sees share price rise 20% in 3 weeks
20 November 2019: Metlifecare gets buyout offer, suspends share buyback
Attribution: Metlifecare release.