FKP and Macquarie Bank announce revised takeover offer for Metlifecare

19 October 2005

Further to the announcement of 30 September 2005, FKP Property Group (FKP) and Macquarie Bank Limited (Macquarie) are pleased to announce that their equally owned vehicle, Retirement Villages New Zealand (RVNZ), has entered into a pre-bid agreement with Private Healthcare (PHC, associated with Mr Cliff Cook) & Todd Lifecare (Todd) which collectively own approximately 60% of shares in Metlifecare, New Zealand's largest retirement village owner and operator.

The pre-bid agreement provides for a revised cash takeover offer for Metlifecare, at NZ$3.90 per share, which values the equity at approximately NZ$341m. RVNZ has received approval from the Overseas Investment Office (OIO). RVNZ expects the offer documents to be dispatched within 3 to 4 weeks.

FKP and Macquarie will each contribute a maximum of NZ$111 million for their respective interest in Metlifecare, depending on the level of shareholder acceptances received. The balance of the acquisition will be funded by non-recourse debt. FKP's investment will be sourced from new facilities provided by ANZ.

The Metlifecare portfolio comprises 1,768 retirement village units across 13 retirement villages, together with 248 nursing home beds and 137 hospital beds. The company has a land bank for the development of a further 630 units. The villages cater for the self-funded retiree market, consistent with FKP's existing business model. The assets are located within desirable markets in New Zealand.

The villages operate with a Deferred Management Fee (DMF) business model, similar to that of FKP, whereby management fees are accrued whilst a resident stays in the village and received in cash when the resident leaves. The standard contract also provides for Metlifecare to retain 100% of the capital gains on the units. It is a mature portfolio, with resales typically exceeding 12% of the portfolio in recent years.

Metlifecare has an experienced and successful management team. Mr Peter Brown, Managing Director and CEO of FKP, said that he is delighted that Mr Cook, founder and director of Metlifecare, will remain as a consultant.

Mr Brown said: "The residents of Metlifecare villages will not be affected by today's announcement. Residents will continue to benefit from the excellent facilities that Metlifecare has developed and maintains."

Macquarie Bank's Chief Financial Officer, Mr Greg Ward, today said: "This investment complements existing investments undertaken by Macquarie and its managed funds in Retirement Villages and Aged Care." Macquarie's capital ratios are not expected to be significantly impacted as a result of the equity investment.

FKP's effective interest in Metlifecare is expected to be accounted for as an equity investment, and is not expected to have a material impact on EPS in the first year.

FKP and Macquarie intend that RVNZ will seek further acquisition opportunities.

Mr Brown said: "The transaction confirms FKP's leadership position in the retirement village sector in Australasia, and more importantly, the relationship with Macquarie will enable FKP to accelerate its ambitions in the retirement sector. This is a key milestone in the evolution of FKP, as it continues towards its goal of achieving 50% of its income from recurring sources by 2008."

For more information please contact:

Peter Brown
Managing Director and CEO
FKP Property Group
Tel: (617) 3223 3869

Darryl Guihot
Chief Financial Officer
FKP Property Group
Tel: (617) 3223 3888

Greg Ward
Chief Financial Officer
Macquarie Bank Limited
Tel: (612) 8232 3087

Erica Sibree
Investor Relations
Macquarie Bank Limited
Tel: (612) 8232 5008

Matthew Russell
Public Relations
Macquarie Bank Limited
Tel: (612) 8232 4102

FKP and Macquarie Bank announce revised takeover offer for Metlifecare (pdf 22KB)

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