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Forsyth Barr

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New Zealand Professional Investment Services Firm, Forsyth Barr

Equity Bottom-Up

<h2>Metlifecare (MET)</h2>
Going, going, going, going…….gone?
Metlifecare (MET) has entered into a new Scheme Implementation Agreement (SIA) where APVG (entity owned by EQT Infrastructure) has agreed to acquire all MET’s shares for NZ$6.00 per share. The parties have also agreed to discontinue all litigation and settle all disputes related to the original SIA. “The Board has canvassed MET investors and has received strong investor support for the scheme over the uncertainty of prolonged litigation.”
<h3>“Strong investor support” but the Chair is not recommending in favour</h3>
MET has been advised that its largest shareholder (NZ Super at 19.96% interest) has entered into a voting deed with APVG where it has agreed to vote its interest in favour of the scheme.&nbsp;&nbsp;In addition&nbsp;MET states that they have received “strong investor support” for the scheme but that a minority of shareholders stated that the offer fell below or at the lower end of their valuation range. &nbsp;Four of MET’s six directors recommend shareholders vote in favour of the scheme with the view that the inherent uncertainty in a COVID-19 environment and the offer being at a 14.9% premium to the last close before 6 July is a “reasonable” outcome. MET’s Chair Kim Ellis is standing firm and does not recommend shareholders vote in favour of the scheme as it doesn’t represent fair value on the basis that Korda Mentha’s independent adviser report values MET in the range of NZ$5.80 – NZ$6.90 per share. The NZ$6.00 offer represents a 5.5% discount to the midpoint of the range.
<h3>Additional details</h3>
<ul>
<li>Plenty of time: MET shareholders have plenty of time to contemplate the announcement with the vote on the scheme currently expected to be held in late September 2020.</li>
<li>No MAC clause: As previously mooted, the new SIA is not subject to a material adverse change clause which was the main factor in the termination of the initial SIA</li>
<li>Implementation date: It is currently contemplated that the scheme will be implemented in late October.</li>
</ul>
Timeline of events
<figure class="editor-figure mceNonEditable"><img src="https://mail.google.com/mail/u/0?ui=2&amp;ik=f57c39853c&amp;attid=0.1&amp;permmsgid=msg-f:1671807722259004764&amp;th=173374440a00bd5c&amp;view=fimg&amp;sz=s0-l75-ft&amp;attbid=ANGjdJ8LIgb8JHL3323Q_L7hsV7g7_3P9b3HQKtyhUFCjl2ty6Dpc9qkelYktSAa1FAdn23ZwlBvuSZZ598BB3b7nW6T_Dpb9diZZoMPpUhbqkZczrOPkq3URB9umUw&amp;disp=emb" width="511" height="314" class="editor-image img-responsive" data-image-whitelisted=""></figure>
&nbsp;
<table class="table table-striped">
<tbody>
<tr>
<td style="width: 40.85pt;">
Key
</td>
<td style="width: 115.45pt;">
Date
</td>
<td style="width: 305.8pt;">
Market Announcement
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
1
</td>
<td style="width: 115.45pt;">
20/11/2019
</td>
<td style="width: 305.8pt;">
NBIO Received
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
2
</td>
<td style="width: 115.45pt;">
19/12/2019
</td>
<td style="width: 305.8pt;">
Offer received at NZ$6.50 per share
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
3
</td>
<td style="width: 115.45pt;">
30/12/2019
</td>
<td style="width: 305.8pt;">
MET board recommends scheme of arrangement of NZ$7 per share
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
4
</td>
<td style="width: 115.45pt;">
16/03/2020
&nbsp;
</td>
<td style="width: 305.8pt;">
Speculative commentary around MAC
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
5
</td>
<td style="width: 115.45pt;">
8/04/2020
&nbsp;
</td>
<td style="width: 305.8pt;">
APVG announces intention to terminate agreement
&nbsp;
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
6
</td>
<td style="width: 115.45pt;">
6/07/2020
&nbsp;
</td>
<td style="width: 305.8pt;">
New NBIO received at NZ$6 per share
&nbsp;
</td>
</tr>
<tr>
<td style="width: 40.85pt;">
7
</td>
<td style="width: 115.45pt;">
10/07/2020
</td>
<td style="width: 305.8pt;">
SIA entered at NZ$6 per share
</td>
</tr>
</tbody>
</table>
Source: Forsyth Barr analysis, Eikon
Aaron Ibbotson &nbsp;CFA Director / Senior Analyst, Equities <a href="https://www.forsythbarr.co.nz/" target="_blank" rel="noopener">Forsyth Barr Limited</a>
P: +64 9 368 9024 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Metlifecare (MET)
Going, going, going, going…….gone?
Metlifecare (MET) has entered into a new Scheme Implementation Agreement (SIA) where APVG (entity owned by EQT Infrastructure) has agreed to acquire all MET’s shares for NZ$6.00 per share. The parties have also agreed to discontinue all litigation and settle all disputes related to the original SIA. “The Board has canvassed MET investors and has received strong investor support for the scheme over the uncertainty of prolonged litigation.”
“Strong investor support” but the Chair is not recommending in favour
MET has been advised that its largest shareholder (NZ Super at 19.96% interest) has entered into a voting deed with APVG where it has agreed to vote its interest in favour of the scheme.&nbsp;&nbsp;In addition&nbsp;MET states that they have received “strong investor support” for the scheme but that a minority of shareholders stated that the offer fell below or at the lower end of their valuation range. &nbsp;Four of MET’s six directors recommend shareholders vote in favour of the scheme with the view that the inherent uncertainty in a COVID-19 environment and the offer being at a 14.9% premium to the last close before 6 July is a “reasonable” outcome. MET’s Chair Kim Ellis is standing firm and does not recommend shareholders vote in favour of the scheme as it doesn’t represent fair value on the basis that Korda Mentha’s independent adviser report values MET in the range of NZ$5.80 – NZ$6.90 per share. The NZ$6.00 offer represents a 5.5% discount to the midpoint of the range.
Additional details

Plenty of time: MET shareholders have plenty of time to contemplate the announcement with the vote on the scheme currently expected to be held in late September 2020.
No MAC clause: As previously mooted, the new SIA is not subject to a material adverse change clause which was the main factor in the termination of the initial SIA
Implementation date: It is currently contemplated that the scheme will be implemented in late October.

Timeline of events

&nbsp;




Key


Date


Market Announcement




1


20/11/2019


NBIO Received




2


19/12/2019


Offer received at NZ$6.50 per share




3


30/12/2019


MET board recommends scheme of arrangement of NZ$7 per share




4


16/03/2020
&nbsp;


Speculative commentary around MAC




5


8/04/2020
&nbsp;


APVG announces intention to terminate agreement
&nbsp;




6


6/07/2020
&nbsp;


New NBIO received at NZ$6 per share
&nbsp;




7


10/07/2020


SIA entered at NZ$6 per share




Source: Forsyth Barr analysis, Eikon
Aaron Ibbotson &nbsp;CFA Director / Senior Analyst, Equities Forsyth Barr Limited
P: +64 9 368 9024 | TF: 0800 367 227&nbsp; Level 23, Lumley Centre, 88 Shortland Street, Auckland

Metlifecare (MET): Going, Going, Going, Going…….gone?

Metlifecare Ltd

Metlifecare (MET): Going, Going, Going, Going…….gone?