Changes to Metlifecare's $216 million deal to merge with two other businesses has met with a mixed response from shareholders.
John Phipps of AMP, with 9.4 per cent of the listed retirement village developer and investor, could not say if he approved of the new terms aimed at sweetening the deal.
"We're considering it," he said of the proposal to merge with one firm owned by majority shareholder Retirement Villages Group and another in the hands of Goldman Sachs and Arrow International.
The new deal reduces the numbers of Metlifecare shares the other businesses get but Shane Solly of Mint Asset Management had concerns.
"The revised terms are a move in the right direction for Metlifecare shareholders but there are still details to work through," Solly said.
"The proposed merger changes Metlifecare's risk profile and shareholders need to be appropriately compensated for the changes," he said.
"Metlifecare's deal to expand into a much larger business was hobbled by unhappy shareholders who sought a change to the terms so those involved get less money."
A fortnight ago, Metlifecare said a $216 million deal would be completed in the next few weeks subject to a meeting and shareholder vote, where Retirement Villages would be excluded.
Under the new terms, Metlifecare will still buy Vision Senior Living, which is 68 per cent owned by Goldman Sachs, and Private Life Care, owned by Retirement Villages Group, which has 50.1 per cent of Metlifecare.
But instead of getting 21 million Metlifecare shares, Vision will get 13 million and instead of 30.5 million, Private will get 29.7 million.
Both vendors will also have to keep those Metlifecare shares in escrow for 16 months after settlement.
Metlifecare also released more information and clarification on the forecast increase in the group operating cash flow next year.
Craig Tyson of OnePath, with 9.1 per cent, said the changes addressed some of the issues his organisation had with the original proposal.
"In particular we believed that the original deal metrics failed to reflect that Metlifecare's portfolio was better quality and had lower gearing than either Vision or Private," Tyson said.
"As a Metlifecare investor, we are also encouraged by the fact that there is value at risk for Vision if the merger does not result in a 50 per cent rerating in Metlifecare's share price over a 28-month period post the deal."
Lengthening the escrow period and increasing the level of financial disclosure to allow Metlifecare investors to better gauge the terms was also good but support was not guaranteed.
"We will be dissecting the new proposal and the independent report before deciding whether to support the new proposal," Tyson said.By Anne Gibson @Anne Gibson Email Anne