Metlifcare merger gets independent greenlight

Alan Edwards, CEO & Managing Director of Metlifecare. Photo / NZ Herald

An independent assessment of a controversial $216 million merger deal of NZX-listed Metlifecare and two other businesses got the thumbs up in an independent assessment report issued this morning.

Greg Anderson, Steven Grant and Anthony Katavich of Northington Partners said the deal was fair to Metlifecare minority shareholders.

"We believe that the key terms of the proposed transaction are fair to the Metlifecare minority shareholders. In our view, the issues of Metlifecare shares as consideration for the purchase of the Vision Senior Living and Private Life Care shares is fair for the Metlifecare minority shareholders.

The most important consideration is the proposed price that will be paid by Metlifecare for the Vision and PLC shares and we conclude that the relative adjusted NTA basis used to derive the negotiated exchange ratio ensures that the Metlifecare minority shareholders are treated fairly," the report says.

The deal, which is subject to various conditions including minority shareholder approval, involves Metlifecare buying unlisted rivals Vision Senior Living (68 per cent owned by Goldman Sachs) and Private Life Care (owned by Retirement Village Group, which has 50.1 per cent of Metlifecare) for a stock and cash deal.

The deal has not been so popular in many other camps and institutional shareholders are understood to be unhappy.

Last month, an initial examination of expansion plan was not been greeted favourably by the Shareholders Association and Metlifecare's managing director and chief executive Alan Edwards was then in discussions with major shareholders in an attempt to get their approval.

UBS analyst Wade Gardiner has criticised the three-way merger, saying Metlifecare had yet to show improvement in returns from operating existing villages and UBS would have preferred greater improvement from the existing business.