Metlifecare says indicative bid too low

Metlifecare CEO Glen Sowry. Screenshot / YouTube

Metlifecare has rejected an indicative takeover offer of $6.50 a share as being too low after sounding out some of its major shareholders.

The board said its internal valuation could be in excess of $8 a share, depending on the assumptions used.

The indicative offer from an unnamed suitor came out of the woodwork last month and, while it would've been a premium to the $5.18 price the shares were trading at, it's still below Metlifecare's net tangible asset value of $6.96 per share.

"Following confidential institutional soundings, a binding offer at $6.50 per share is unlikely to be supported by the requisite majority of shareholders voting. In particular, the Accident Compensation Corporation, Nikko Asset Management, and Generate have advised they would vote against such an offer," the company said in a statement.

Metlifecare has told the suitor and said it's also received two other expressions of interest. Neither were as advanced as the non-binding indicative offer put forward.

The shares were recently up 1.8 per cent at $6.

"I'll be interested to see whether the $6.50 is the best offer or the first offer," said Grant Williamson, a director at Hamilton Hindin Greene.