New Zealand corporate property deals worth $1.67 billion are either axed or hang in the balance in this pandemic era.
Asia Pacific's $1.49b takeover of Metlifecare looks tenuous, even though the retirement specialist said last week it was still on, while Australian-listed Centuria Capital axed its $180m takeover of Augusta Capital, costing executive Mark Francis around $30m in a share issue which now won't happen.
But he was reluctant to make that about him, saying instead: "Everybody had a lot at stake. It's an unprecedented global financial meltdown. It's just a bizarre set of events. There's not a company in the world whose share price has not been smashed around."
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Why did Centuria scrap that takeover? Most likely sinking share prices of both companies.
Augusta's share price has halved in the past month, from trading at $2.13 on February 26 on the NZX to around $1.20 now.
Centuria's share price has also plummeted from A$2.76 on February 19 to around A$1.54.
Craig Tyson, ANZ's head of Australasian property securities, said that entity had a large 12.1 per cent stake in Augusta "and are very disappointed that Centuria has pulled out. These are very uncertain times and markets have been in freefall for the last three weeks. Once we get through the next month or so and markets settle down discussions could resume but, if not, we are comfortable with our holding in Augusta given its strong growth pipeline."
He noted Augusta's share plummet of around 20 to 30 per cent but said that was in line with the market falling generally and Augusta was no exception.
"Disappointing but the reflecting the uncertainty in the equity market in general as investors try to understand the knock-on effects on tenants, rents and valuations going forward," he said of Centuria calling a halt to the deal.
Some market watchers think the Metlifecare deal could also be axed.
Tyson said ANZ sold down its stake in that retirement business after the takeover was announced - a smart move, given the share price rose steeply before the Covid-19 crisis.
"The retirement sector has sold off due to the risk to aged-care facilities in particular, however, the measures taken by Government with level 4 alert should reduce the risk of this happening," Tyson said.
Retirement villages also had well-rehearsed processes in place to deal with virus outbreaks such as flu and norovirus within villages, "and two listed operators we spoke to said that they get five to 10 events each year on average. I expect and hope that they will deal with this better than many are expecting", Tyson said.
Metlifecare said last week it was continuing to advance its scheme implementation agreement with Asia Pacific Village Group.
"APVG has advised Metlifecare it is monitoring the Covid-19 pandemic and the implications of it in New Zealand. APVG has termination rights under the scheme of arrangement, including termination rights in the event of a material adverse change. Metlifecare does not consider that a [change] has arisen at this point in time but can give no assurance that a material adverse change might not arise in the future," the company said on March 26.