Retirement village owner and operator Metlifecare is about to morph into a business with assets of nearly $800 million, after a vote yesterday approved a merger with two other specialists in the sector.

Shareholders speedily voted through the $216 million deal to expand the business, which had assets of $578 million, by taking over Vision Senior Living and Private Life Care Holdings.

The merged entities will have $1.9 billion of investment properties, although debt has to be deducted to reach total net assets.

Chief executive and managing director Alan Edwards was delighted after it was announced that 79 per cent of shareholders, controlling 49.3 per cent of the register had agreed.


"It took a whole lot of understanding between all the parties in terms of what would make the deal work," Edwards said, referring to three separate proposals, each more favourable to major institutional investors AMP, OnePath, Fisher Funds, Devon Funds Management and Mint Asset Management.

Majority shareholder Australia's Retirement Villages Group was banned from voting as it was a related party.

Metlifecare will soon issue 39 million new shares and get eight extra villages throughout New Zealand with significant development potential.

AMP's John Phipps was happy, after last-minute alterations to sweeten the deal, but criticised Northington Partners' independent appraisal which he said took a narrow focus and did not cover issues related to the commerciality of the deal.

But there was no need for discussions at the 19-minute meeting because all these had been held throughout the last three weeks.

These resulted in a more commercially favourable and robust outcome for investors, he said.

John Hawkins of the Shareholders Association said the changes improved the outcome.

"After giving it a little more thought, we changed our position," he said, referring to the association's opposition to the second deal.


"There's a bit more on the table for shareholders in return for the extra debt they are taking on," Hawkins said.

Shane Solly, of Mint Asset Management, also approved.

"It puts the business in a good position and there is an appropriate level of risk being carried by all the new investors in the merged group," Solly said.

"In the end, I think it's been a good outcome."

Chris Gaskin, of Devon, said he was very pleased with the revised terms which offered value and less dilution for existing shareholders.

"The other positives of the transaction for us include the strategic benefits of having an in-house development team both for new development opportunities and to maximise returns from the existing asset base, and increased economies of scale," Gaskin said.

"We think the increased focus on Auckland is now a real point of differentiation for Metlifecare in the sector," he said.

"A key requirement for us was the agreement to restructure the board to include four independent directors as we think a majority of independent directors is best practice corporate governance."

* 24 retirement villages in merged entity.
* $1.9b of investment properties.
* All but one village in the North Island.
* Largest village is Vision's Waitakere Gardens with 324 units.