Global private equity group EQT has withdrawn its plan to take over retirement village group Metlifecare for NZ$1.46bn (€800.3m), citing the impact of COVID-19 for its decision.

In December last year, Asia Pacific Village Group (APVG), an entity owned by EQT Infrastructure IV fund, proposed the takeover of Metlifecare, which operates a NZ$3.6bn portfolio of 25 villages operating some 6643 units.

The proposed scheme of implementation arrangement was to be approved by shareholders at a special meeting this month.

Metlifecare, which is listed in both New Zealand and Australia, informed the market that it received notice from APVG of its intention to terminate the transaction.

APVG had asserted that COVID-19 was a specified event triggering the “material adverse change” clause”, said Metlifecare.

The suitor was concerned that the pandemic had reduced, or was reasonably likely to reduce, the consolidated net tangible assets of Metlifecare by at least NZ$100m and its net profit by at least 10% this financial year, and possibly the following two financial years.

According to Metlifecare, APVG said the SIA was breached when Metlifecare did not consult or get its consent when the retirement village operator went into a lockdown as directed by New Zealand.

Under the Level 4 directive government directive for COVID Metlifecare ceased its NZ$960m development programme.

“Metlifecare is taking legal advice on the APVG correspondence, but its initial view is that the assertions are without substance and that APVG does not have a lawful basis to terminate the scheme implementation agreement,” the company said.

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