Bidders circle stake in Metlife

Cliff Cook

A battle is shaping up over Metlifecare with at least four serious bidders understood to have lined up to run a ruler over the retirement village company.

More than 10 interested parties have sought further information about the 25 per cent stake Metlifecare founder Cliff Cook has put up for sale, sources told the Business Herald.

Four are considered serious contenders to make a full takeover bid, which a sale of the stake would trigger under New Zealand law.

One bidder confirmed its intentions late last week. A report in the Australian Financial Review on Friday quoted chief executive of property group FKP, Peter Brown, as being "very interested" in participating in a Metlifecare sale process. Brown could not be reached for comment.

Others tipped as potential bidders include retirement facility developer Primelife, its shareholder, investment bank Babcock & Brown, and private equity investor Pacific Equity Partners, all Australian.

Sources said interest has come from as far afield as the US, with local companies also in the running. Potential bidders range from private equity investors to retirement village operators.

Metlifecare was put into play by Cook's decision to appoint investment bank Goldman Sachs JBWere to advise on a potential sale.

Goldman Sachs head of investment banking Andrew Barclay would not comment, but the bank is believed to be midway through the process of sending out an information memorandum on Metlifecare to interested parties.

Because Cook has a "drag along, tag along" agreement with fellow major shareholder Todd Corporation, which holds 35 per cent of Metlifecare, a bidder that bought his shares could secure 60 per cent of the company.

Under the agreement, Cook has to offer to sell his shares to Todd Corporation first before cementing a sale, but if it will not agree to the price, he can require it to sell their shares to the buyer he has found.

His decision to seek a buyer is believed to have put him at odds with the private company, which is believed to have not yet said whether it wants to move to a majority or not.

"That's an unlikely scenario for them," said one commentator, noting the Todd Corporation usually left management of public companies to others when it invested.

Cook referred inquiries to Metlifecare chairman Peter Fitzsimmons, who could not be contacted for comment.

Small companies investor Fisher Funds is another major shareholder in Metlifecare. Chief investment officer Warren Couillault said his company had already formed a view on what was best for its shareholders, but he would not say what that was.

He said the fund manager only kept a small portfolio of investments in growing companies and had to go through the difficult process of finding a good replacement if it lost one. "However, we realise the world changes and companies' fortunes get better or worse and we are pragmatic about what we do with our investments," he said, noting price would always play a part.

Battle lines

* Metlifecare founder Cliff Cook has put his 25 per cent stake in the retirement village operator up for sale.
* As many as thirteen parties are thought to have expressed an interest.
* Todd Corporation, with 35 per cent, has the right of first refusal over the shares. But if Cook and Todd can not agree on the price he can require it to sell its shares to the buyer he has found. Indicative bids are due shortly.