Large block of Metlifecare shares go on sale

Yes, there is fire beneath those thick clouds of smoke billowing around Metlifecare, the retirement village operator named in sharemarket rumours as a takeover target.

Market sources confirmed yesterday that a big block of shares was up for grabs.

That was as the company's share price hit a new high of $3.10 - a jump of 19 per cent in eight days.

The biggest part of that jump - a 36c gain - was in the three trading days after the National Business Review put the takeover talk on the record last Friday.

Listed on the sharemarket 10 years ago, Metlifecare has a market capitalisation of $268 million and two main shareholders - Todd Capital (35 per cent) and founder Cliff Cook (25 per cent).

Cook would not comment yesterday. Nor was comment available from Wellington's Todd Capital.

The purchase of either of those stakes would require a takeover offer to the other shareholders, which include Fisher Funds, on 13 per cent, and just under 2000 small investors.

A five-year "standstill" agreement where Cook and Todd agreed not to buy or sell more shares - a device intended to block then-investor Eric Watson from bulking up his stake - has just expired.

If either Cook or Todd want to sell out, the other party has first right of refusal.

Like the NBR, the Business Herald has been told that potential buyers - other than either Cook or Todd - have been sniffing around.

Metlifecare is a player in property as well as aged care.

The speculation in the market is that bad blood between Cook and Todd is part of the background to the possible sell-off, with Cook in favour of more aggressive growth.

Another part of the jigsaw: Metlifecare's chief executive, Gavin Aleksich, is leaving the company in April next year to join Renaissance Lifecare. Renaissance is a start-up retirement village company in the UK - majority-owned by Cook.

Also of note: Metlifecare's board announced last month that a management contract with Cook himself had been ended by mutual consent.

Consolidation is on the cards for businesses in the aged-care sector.

"There's certainly been a lot of consolidation in the Australian market," Aleksich said. "We haven't seen that here yet, but it's logical that at a point in time some of that will occur."