NZ: Metlifecare’s board recommends $1.5B takeover bid by European private equity firm

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A boost for the village sector across the ditch. The New Zealand Superannuation Fund has agreed to sell its 19.9% stake in the provider – which has 25 villages – to European private equity firm EQT in a $1.5 billion takeover.

Metlifecare’s board signed a scheme implementation agreement with the private equity fund manager – which has EUR 41 billion in assets under management – and unanimously recommended shareholders accept the $7 per share offer which values the village operator at $1.49 billion (pictured is its FY19 results).

“The Board has made it clear for some time that the market has undervalued the company,” Metlifecare Board Chair, Kim Ellis said. “The price of $7 represents a 67% premium to the company’s 52-week trading low and a 38% premium to the closing price prior to the announcement of the initial offer and is within the company’s own valuation range.”

The NZ Super Fund had raised its stake in Metlifecare back in 2013 when it bought 35.7 million shares at NZ$3.53 apiece, or about NZ$126.1 million, from FKP Property’s Retirement Villages New Zealand (the old Aveo).

EQT said other Metlifecare shareholders that hold 22% of the stock have indicated their support, giving the private equity firm about 42%. A scheme requires 75% support and the support of at least half of all votes cast.

Ken Wong, EQT Partners’ Managing Director, said his firm is committed to continue developing and operating retirement villages.

New Zealand has proven successful in pioneering its ‘continuum of care’ retirement village model, backed by the sector’s ‘social license’ – championed by John Collyns, the Executive Director at the NZ Retirement Villages Association – where the public has a clear understanding of the value proposition of villages.

Metlifecare’s shareholders will now vote on the scheme at a special meeting expected to be held in April 2020.