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Retirement Villages to sell 37.7 percent , $270 mln stake in Metlifecare, repay debt

Monday 21st October 2013

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Australia's Retirement Villages Group, the biggest shareholder of Metlifecare, has hired Goldman Sachs to sell its 37.7 percent stake, completing an exit that began when the New Zealand company merged with two rivals last year.

Goldman has been given the sale mandate ahead of the Nov. 23 expiry of the escrow period for RVG's 79.4 million shares, according to a statement from ASX-listed FKP Property Group, which manages RVG.

The stake is worth about $270 million at today's price and much of the proceeds will be used to repay RVG's debt.

RVG first sold down part of its holding as part of Metlifecare's merger last year with Vision Senior Living and RVG's Private Life Care business. Vision's private equity shareholders had been Goldman Sachs and Arrow International. Goldman Sachs was joint lead manager of last year's selldown.

FKP Property said the proceeds of the sale will be used to retire RVG's $186.3 million of secured debt, leaving it as a debt-free wholesale fund with 30 Australian retirement villages.

"It has been a protracted process, but through FKP's active management, and in line with our stated strategy, RVG will be debt free and the fund will be able to fully concentrate on its substantial Australian portfolio," FKP chief executive Geoff Grady said. "This transaction will also enable management to expedite the transition of FKP to a pure retirement group."

Shares of Metlifecare rose 2.4 percent to $3.42 and are rated a 'buy' base on the consensus of four analysts polled by Reuters. The median price target is $4.'

Metlifecare will begin trading on the ASX today in a secondary listing.

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