Retirement giant Metlifecare has filed its statement of claim against would-be suitor Asia Pacific Village Group over pulling out of its $1.49 billion takeover offer.
Asia Pacific, owned by Swedish private equity firm EQT Infrastructure, entered into a scheme implementation agreement with the Auckland-headquartered business on December 29 but the pandemic changed its plans and on April 28, it said it would pull out.
Metlifecare's court action challenges the validity of Asia Pacific's notice to terminate the deal.
Next Thursday, Metlifecare expects a hearing.
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Asia Pacific says the pandemic breakout resulted in Metlifecare's asset value plummeting by more than $200 million, based on long-term cash flows. It cannot proceed with its planned $1.49b takeover of the business whose shares were trading around $7 before the pandemic but sank to just over $4 when it withdrew.
It also accused Metlifecare of deferring at least $34.6m of development, remediation, maintenance and refurbishment work outside of New Zealand's alert level 4 lockdown. Work due before the end of June was being pushed into the next financial year, and 2021 activity is being pushed into 2022, it said.
Metlifecare said today the proceedings reiterate the reasons it considers there was no lawful basis to terminate the agreement.
Chairman Kim Ellis said today: "In refusing to fulfil their contractual obligations under the scheme implementation agreement, Asia Pacific has left us with no choice but to take this legal action to protect the rights of Metlifecare and its shareholders. The board of Metlifecare remains strongly committed to the successful completion of the scheme."
The claim says Asia Pacific had no reasonable basis to conclude that a prescribed occurrence has occurred that would represent a breach of the agreement. Specifically, Metlifecare gave Asia Pacific reasonable access to information about, kept it reasonably informed of, and consulted with it about steps it took under alert level 4 lockdown restrictions.
The case is due to go to court next Thursday when Metlifecare will seek an expedited court timetable.
That hearing will also consider Metlifecare's separate proceeding applying for initial orders to call a meeting of its shareholders to vote on the scheme plan. That meeting is expected in late June or early July.
Metlifecare has engaged Stephen Hunter QC and Chapman Tripp.
Shares are today trading around $4.30 and the company has a market cap of $917m - well below its previous value around $1.49b when Asia Pacific was keen.