Metlifecare investors agree to purchase
Almost 80 per cent of Metlifecare's minority shareholders have voted in favour of its revised offer for two smaller firms, in a move that will transform the company into one of the New Zealand's biggest private retirement village operators.
The company earlier today caved to last minute pressure from institutional shareholders after weeks of tense backroom negotiations, and lowered its offer for Vision Senior Living to 10 million upfront shares from 13m previously with an earn out of 7m shares.
The offer for Private Life Care Holdings was kept unchanged at 29.7m upfront shares.
Valued at $2.20 per share, that puts the price of the new deal at $86.5m.
"The merger is a significant milestone for the company and brings with it a number of benefits for Metlifecare and our shareholders", said independent director Brent Harman.
The acquisition and merger, which is still contingent on Overseas Investment Office approval, will create a business with 3902 existing retirement units, more than half of which will be in Auckland.
That's 817 more units that rival Ryman Healthcare, which currently controls about 8 per cent of the market.
As part of the deal, the company will also cancel a planned capital raising which it hoped would generate as much as $15m in cash and instead it will sell off some of its property assets to pay down debt.
The addition of Vision's bank liabilities, a major sticking point when the deal was first launched, will push the company's overall debt levels to $202m from $184m currently, representing 22 per cent of total assets.
Metlifecare will also appoint two additional two directors to its board as part of the deal.
Separate to the Vision and PSL deal, Metlifecare told investors that a preliminary valuation of its properties by CBRE showed that its net asset value was likely to fall by as much as 20 per cent from $578m as of December 31 to $462.4m.
Metlifecare shares were unchanged at $2.16 after the announcement, just about on par with where they were a year ago.