Rest-home deal in sight says founder

Metlifecare founder Cliff Cook said yesterday his Private Health Care (PHC) was at an advanced stage in selling its 25 per cent holding in the pensioner-home operator.

The statement was made in response to a call from Metlifecare's independent directors for an update on sale negotiations.

Among parties PHC was talking with was Metlife's 35 per cent owner, Todd Lifecare, which has a pre-emptive option on the stake.

The sale of the stake could trigger a full takeover of Metlifecare. Under takeover rules, any investor acquiring more than 20 per cent of a company's shares must launch a takeover for the entire company.

But under a shareholder agreement, Cook first has to offer his shares to Todd, a unit of Todd Capital, at the same price Cook agrees with the prospective buyer.

If Todd does not agree to the price, it has to sell its stake to the buyer Cook has lined up. In April, the stock exchange was told Cook had offered his 21.7 million shares to Todd Capital for $3.72 each, or $80.7 million. The deal fell over.

This month PHC was reported to have received three offers, and Cook indicated he would decide at the end of the month. Names being linked to the deal include property group FKP, retirement facility developer Primelife and its shareholder, Babcock & Brown, and private equity investor Pacific Equity Partners.

There was been considerable rationalisation in the sector already this year. Macquarie Bank bought Eldercare from Abano in May for $63.5 million, and in July, Australian company DCA bought the country's largest private rest-home operator, Guardian, for $300 million.

Cook is selling to concentrate on his investments overseas.

- NZPA