Metlifecare chairman Kim Ellis opposes the proposed $1.27 billion takeover by Asia Pacific Group of the NZX-listed retirement specialist.
Documents released to the NZX today say he considers the takeover support from NZ Super Fund, with 19.9 per cent of the company, had limited the board's negotiating power.
As a director and shareholder, he says he is disappointed about what he calls the fait accompli process and outcome and does not consider the $6/share offer yet to be voted on adequately reflects the underlying value of shares.
The original offer was $7/share, resulting in a $1.49b offer from Asia Pacific, a subsidiary of Switzerland's EQT Infrastructure. But that was lowered to $6.
"Accordingly he is unable to support the scheme and therefore recommends shareholders vote against the scheme. Mr Ellis will be voting the Metlifecare shares held by his associated family trusts against the scheme," the document said.
But Ellis is a lone voice.
A majority of Metlifecare's directors back the deal: Chris Aiken, Mark Binns, Alistair Ryan and Rod Snodgrass recommend shareholders vote in favour of it.
Ellis said the unusual fait accompli core terms supported by Metlifecare's largest shareholder left no opportunity for the board to use litigation to negotiate the offer price up to the $6.35 valuation midpoint of the earlier independent adviser's report.
He considers Metlifecare's strong litigation position was displayed in the FY20 underlying profit and NTA results announced when the company declared its full-year result on August 26.
For the takeover scheme to succeed, more than 75 per cent of the votes cast and more than 50 per cent of the total number of Metlifecare shares on issue must be voted in favour.
A scheme booklet was released this morning and that showed independent adviser Calibre Partners assessed Metlifecare shares to be worth $5.80 to $6.90. Therefore EQT's offer price is below the midpoint.
Metlifecare shares are today trading around $5.90. Shareholders are due to vote on October 2 when a meeting will be held in Auckland but also be online
Last month, the Herald reported on how property revaluations reflecting valuer caution because Covid-19's economic impact drove Metlifecare to report a bottom-line loss of $33.7m for the June year, compared to a $51.2m profit in 2019.
The listed retirement business said revenue rose 7.7 per cent from last year's $124.5m to $134.1m. Metlifecare said it had reported a solid operating performance in a period which included the full effects of the Government-mandated lockdown.
Chief executive Glen Sowry said despite the significant challenges and costs involved in successfully keeping residents and employees safe from Covid-19, the company delivered an underlying profit before tax of $93.8m, slightly below last year's strong performance.
"This is an excellent achievement in a tough period. After an encouraging first half we experienced a temporary, but major, sales decline in April and May 2020 due to the Government-mandated lockdown restrictions. While our whole team did an incredible job of keeping our villages safe, we invested heavily in additional staff, training, security and personal protective equipment," Sowry said.
"We were pleased to see sales momentum return in late May and continue into the first part of the new financial year. Despite the challenges imposed on us by the lockdown, we managed our costs well and maintained good margins," Sowry said in late August.