Metlifecare Inks Revised $839M Deal With EQT Unit

By Benjamin Horney
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Law360 (July 10, 2020, 12:40 PM EDT) -- Metlifecare has agreed to a revised NZ$1.28 billion ($838.91 million) takeover offer from EQT, and the New Zealand retirement community operator is dropping its lawsuit against the private equity firm, which previously sought to escape the deal because of the coronavirus pandemic.

The updated bid would see Metlifecare Ltd. acquired by EQT affiliate Asia Pacific Village Group Ltd., or APVG, for NZ$6.00 per share, according to separate Friday statements from Metlifecare and EQT. That's $1 per share lower than the original deal signed in December. As part of the amended agreement, the two sides have pledged to "discontinue all litigation and settle all disputes" related to the original deal.

The board of directors for Metlifecare unanimously believe the offer should be put to a shareholder vote. Although a number of Metlifecare investors have signaled support for the new deal — including the Guardians on the New Zealand Superannuation Fund, which owns a 19.9% interest in Metlifecare — not everyone is pleased. A minority of Metlifecare shareholders believe the price is too low, as does Metlifecare Chair Kim Ellis.

While Ellis "feels strongly that shareholders should be given the opportunity to vote on the scheme," he also believes the revised deal "does not represent fair value" and should be at least slightly higher.

The bid would be subject to shareholder approval and other customary conditions. It is not subject to a material adverse change condition. Additionally, the offer contains exclusivity provisions that restrict Metlifecare's ability to engage on competing proposals. There are exclusions, however, including if an offer is made that is considered a superior proposal. APVG has the right to match any other offer that is made.

Fabian Gröne, a partner at EQT and investment adviser to EQT Infrastructure, said in the press release that "Metlifecare is a well-respected operator of high-quality retirement villages known for its provision of exceptional care."

"Metlifecare's growth pipeline will be accelerated by EQT's support and investment horizon that looks beyond the current environment," Gröne added. "EQT Infrastructure is pleased that NZ Super, Metlifecare's largest shareholder, and the board are supportive of the revised offer."

The announcement comes a few days after Metlifecare revealed a revised, nonbinding indicative by APVG. At the time, Metlifecare said it would engage with APVG "in good faith."

The original deal valued Metlifecare at NZ$1.5 billion ($900 million). After the COVID-19 outbreak began wreaking havoc on the world, APVG sought to escape the agreement, noting that the coronavirus had contributed to a significant decline in the value of Metlifecare's net tangible assets and would likely affect its profits. In seeking to cancel the deal, APVG — which is owned by EQT Infrastructure IV Fund — cited "material adverse changes" caused by COVID-19. 

In response, Metlifecare said the justification for nixing the deal was "simply wrong."

Metlifecare owns and operates a portfolio of 25 retirement villages in New Zealand, according to its website. 

Metlifecare is advised by Jarden Partners Ltd., Simmons Corporate Finance Ltd. and New Zealand law firm Chapman Tripp. 

King & Wood Mallesons, Simpson Thacher & Bartlett LLP and New Zealand law firm Bell Gully are serving as legal advisers to APVG and EQT Infrastructure IV. EQT is also being advised by Goldman Sachs Group Inc., Ernst & Young and Colliers International.

--Additional reporting by Elise Hansen. Editing by Alyssa Miller.

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