NZ’s Metlifecare seeks legal action to enforce $899m deal with EQT unit

Auckland, New Zealand. Photo by Dan Freeman on Unsplash

New Zealand’s Metlifecare has sought legal action again Swedish private equity firm EQT AB, which intends to terminate its NZ$1.49 billion ($899.66 million) offer to acquire the retirement village operator, according to its statement.

Metlifecare, one of New Zealand’s largest retirement village providers, had asked the country’s High Court to order Asia Pacific Village Group Limited (APVG), a unit of EQT, to fulfil its contractual obligations under the Scheme Implementation Agreement (SIA) entered on December 29, 2019.

APGV had agreed to acquire 100 per cent of Metlifecare shares by way of a scheme arrangement at a sweetened bid of NZ$7 per share in December.

In a statement in April, however, EQT issued a notice to Metlifecare that it intends to terminate the SIA due to “circumstances having arisen,” which APGV considers permit it to terminate the agreement.

APVG said the coronavirus pandemic triggered the Material Adverse Change clause under the companies’ agreement because it has reduced or could reduce Metlifecare’s tangible assets and could reduce its underlying net profit by at least 10 per cent in the fiscal year 2020, or in the following two years.

It also alleged that Metlifecare “has failed to comply with its obligations under the SIA” to carry on the business in the ordinary course and in the same manner as conducted in the 12 months prior to the date the SIA was signed.

“APVG does not consider that the relevant circumstances are capable of remedy and, assuming they are not in fact remedied within 10 business days, APVG intends to terminate the SIA within the following 5 business days,” the firm said in a statement in April.

Metlifecare, however, filed the Statement of Claim, challenging the validity of APVG’s notice to terminate the agreement. It also sought orders against the EQT Infrastructure Fund IV investors, who have agreed to fund the transaction under an Equity Commitment Letter.

“In refusing to fulfill their contractual obligations under the Scheme Implementation Agreement, APVG 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,” Metlifecare Chairman Kim Ellis said.

The proceeding reiterates the reasons why Metlifecare considers there is no lawful basis to terminate the SIA, namely that no Material Adverse Change (MAC) has occurred and that there have been no prescribed occurrences that would permit APVG to terminate the SIA.

The Statement of Claim also adds that APVG “has no reasonable basis to conclude that a prescribed occurrence has occurred that would represent a breach of the SIA”.

Metlifecare claims that it gave APVG “reasonable access to information about, kept APVG reasonably informed of, and consulted with APVG in relation to the steps Metlifecare took in response to the Level 4 lockdown restrictions in New Zealand”.

The matter is expected to initially be heard in the High Court on May 28, 2020.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.