| Wed 28 Mar 2007, 15:56 | | SRL/SAC - SA Retail / SA Corporate - Pro forma fin |
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SAC SRL
SAC SRL
SRL/SAC - SA Retail / SA Corporate - Pro forma financial effects
and salient dates and times in
respect of the offer
SA Retail Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1999/025764/06)
Share Code: SRL & ISIN Code: ZAE000034328
("SA Retail")
SA Corporate Real Estate Fund
(formerly Martprop Property Fund)
(Incorporated in the Republic of South Africa)
Share Code: SAC & ISIN Code: ZAE000083614
A Collective Investment Scheme in property registered in terms of
the Collective Investment Schemes Control Act, No. 45 of
2002 and managed by SA Corporate Real Estate Fund
Managers Limited
(formerly Marriott Property Fund Managers Limited) (Registration
number 1994/009895/06)
("SA Corporate" or "the Fund")
Pro forma financial effects and salient dates and times in respect
of the offer by SA Corporate Real Estate Fund ("SA
Corporate") to SA Retail linked unitholders and withdrawl
of cautionary announcement
1. Introduction
It was announced on the Securities Exchange News Service ("SENS")
of the JSE Limited on Tuesday, 16 January 2007, that SA
Corporate had delivered an offer letter to the SA Retail
Board in terms of which SA Corporate offered to acquire
all the SA Retail linked units in issue ("the Offer"). It
was further announced on 14 March 2007, that SA Corporate
had amended the Offer to include a cash underpin, in
order to comply with the Securities Regulation Code on
Takeovers and Mergers ("SRP Code").
SA Corporate hereby offers to acquire all of the SA Retail linked
units held by the SA Retail linked unitholders, for the
Offer consideration of either:
- 3,05 new SA Corporate units for every 1 SA Retail linked
unit held, rounded to the nearest whole number ("unit
offer"); or
- a cash consideration of R10,50 plus the interest
consideration (referred to below) for every 1 SA Retail
linked unit held ("cash offer").
The interest consideration shall be calculated on the cash
consideration of R10,50 per SA Retail linked unit at:
- 9% per annum calculated from 1 October 2006 until the
earlier of the Offer payment date or 30 April 2007 (both
days inclusive); and
- the prime rate of interest calculated from 1 May 2007
until date of payment (both days inclusive), if the Offer
has not been implemented by 30 April 2007.
The proposed transaction will be implemented by way of an offer in
terms of section 440A of the Companies Act, No.61 of
1973, as amended (the "Companies Act").
Should the Offer be accepted by SA Retail linked unitholders
holding not less than nine-tenths of the SA Retail linked
units in issue and whose votes will be considered
eligible in terms of the SRP Code for purposes of
invoking section 440K of the Companies Act, it is the
intention of SA Corporate to exercise its entitlement to
compulsorily acquire the remaining SA Retail linked units
in issue in terms of section 440K of the Companies Act.
Should SA Corporate elect to exercise its entitlement in terms of
section 440K of the Companies Act, SA Retail will become
a wholly-owned subsidiary of SA Corporate and the listing
of the SA Retail linked units on the JSE will be
terminated.
2. Opinions and recommendations
2.1 The opinion of the independent expert
The SA Retail Board of Directors ("SA Retail Board") appointed an
independent sub-committee comprising non-executive
directors of SA Retail, in order to consider the terms of
the Offer, which has in turn appointed KPMG to provide
them with advice as to the fairness and reasonableness of
the terms and conditions of the Offer. KPMG has
considered the terms and conditions of the Offer and has
expressed an opinion that, based on their assessment, the
Offer is fair and reasonable to SA Retail linked
unitholders and has advised the independent sub-committee
accordingly. SA Retail linked unitholders are referred to
the opinion from KPMG expressed in their opinion letter
set out in Annexure 11 to the circular posted to SA
Retail linked unitholders dated 28 March 2007 and are
encouraged to read it in its entirety.
2.2 Opinion of the independent sub-committee
The independent sub-committee has considered the terms of the
Offer, and taking into account the opinion of KPMG, is of
the opinion that the terms of the Offer are fair and
reasonable to the SA Retail linked unitholders.
2.3 Opinion of the SA Retail Board
The SA Retail Board has considered the terms of the Offer and
taking into account the opinion of the independent expert
(referred to in 2.1 above) and the independent sub-
committee (referred to in 2.2 above), is of the opinion
that the terms of the Offer are fair and reasonable and
recommend that SA Retail linked unitholders accept the
Offer.
3. Conditions of the Offer
The Offer is subject to the following suspensive conditions:
* obtaining the requisite SA Corporate unitholders approval
for the Offer. SA Corporate currently has the support of
55% of its unitholders;
* SA Corporate procuring acceptances for the Offer from
those SA Retail linked unitholders, holding at least nine
tenths of the SA Retail linked units in issue and whose
vote will be considered eligible by the SRP for purposes
of invoking section 440K of the Companies Act. SA
Corporate has secured irrevocable acceptances of the Unit
Offer from SA Retail linked unitholders holding
approximately 97% of the eligible linked units in issue;
and
* obtaining the requisite approvals from all applicable
regulatory authorities.
4. Salient dates and times of the Offer
The expected dates and times pertaining to the Offer are set out
below:
2007
Circular posted to SA Retail linked Wednesday, 28 March
unitholders on
Opening date of the Offer at 09:00 on Wednesday, 28 March
Last day to trade in order for SA Thursday, 19 April
Retail linked unitholders to
participate in the Offer on
SA Retail linked units trade ex the Friday, 20 April
right to participate in the Offer on
Record date on which SA Retail linked Thursday, 26 April
unitholders must be recorded in the
register in order to participate in the
Offer on
Closing date of the Offer at 12:00 on Thursday, 26 April
Results of the Offer announced on SENS Monday, 30 April
on
Results of the Offer published in the Wednesday, 2 May
South African press on
Offer consideration posted to or Within seven days of
credited to the accounts of offer the Offer being
participants who have not accepted and becoming
dematerialised their SA Retail linked unconditional
units
Offer consideration credited to the Within seven days of
CSDP or broker, as the case may be, of the Offer being
offer participants who have accepted and becoming
dematerialised their SA Retail linked unconditional subject
units and whose acceptance has been to receipt of
received by the transfer secretaries notification by the
transfer secretaries
Notes:
1. The above dates and times are subject to amendment
by SA Corporate. Any such amendment will be released on
SENS and published in the South African press.
2. No dematerialisation or rematerialisation of SA
Retail linked units will take place between Thursday, 19
April 2007 and Thursday, 26 April 2007, both days
inclusive.
3. All times indicated above are South African times.
4. Unaudited pro forma financial effects of the Offer
The table below sets out the unaudited pro forma financial
effects of the Offer on a SA Retail linked unitholder.
The pro forma income statement effects are based on
forecast SA Retail figures for the period ending 31
December 2007 while the pro forma balance sheet effects
are based on the interim SA Retail results at 30
September 2006.
The unaudited pro forma financial effects are the responsibility
of the SA Retail directors and have been prepared for
illustrative purposes only, in order to provide
information on how the Offer might affect an SA Retail
linked unitholder. Because of their nature, the unaudited
pro forma financial effects may not give a true
reflection of the actual financial effects of the Offer
on an SA Retail linked unitholder.
Before Unit % Cash %
the Offer Change Offer Change
Offer (2) (3)
(1)
Weighted earnings per 87.42 87.93 1%
linked unit ("EPLU")
(cents) 96.89 11%
Weighted headline
earnings per linked
unit ("HEPLU") 101.57 98.21 (3%)
(cents) 96.89 (5%)
Distributions (cents) 92.08 96.24 5%
96.89 5%
Market value (Rand) 10.00 10.83 8% 10.50 5%
Net asset value 7.66 10.43 36%
("NAV") (Rand) 10.50 37%
Net tangible asset 7.66 9.27 21%
value ("NTAV")
(Rand) 10.50 37%
Notes:
1. The "Before the offer" information is based on the
existing SA Retail as follows:
EPLU, HEPLU and Distributions are based on the 12
months forecast to 31 December 2007 and include the
Sharemax acquisition (as set out in paragraph 3.3 of
the circular posted to SA Retail linked unitholders
dated 28 March 2007) from 1 March 2007. The units in
issue include the consideration units for this
acquisition. The weighted number of linked units has
been used to calculate the weighted numbers.
Market value is based on the closing price of SA
Retail on 12 January 2007, being the date the Offer
was made.
NAV and NTAV are based on the last reported results
of SA Retail, being 30 September 2006.
2. The "unit offer" information is based on the
combined entity adjusted by the swop ratio of 3,05 units
as follows:
EPLU and HEPLU post offer is based on 12 months of
the current SA Corporate earnings plus 8 months
adjusted SA Retail earnings with effect from the
effective date, 1 May 2007, and the weighted number
of units in issue.
Distributions are based on the combined forecast
distributions for the 12 months to 31 December 2007.
SA Retail`s net distributable income from the period
1 October 2006 to 30 April 2007 will be paid to
unitholders of the combined fund.
Market value is based on the closing price of SA
Corporate (R3,55) on 12 January 2007, being the date
the Offer was made, multiplied by the exchange ratio
of 3,05. Since then the SA Corporate price has
increased to a price of R3,95 at 16 March 2007, being
the last practicable date for the circular, which
results in a net increase in market value of 20% on
the pre offer SA Retail price.
NAV and NATV are based on the pro forma combined
balance sheet (incorporating the last published
balance sheets, being 30 September 2006 for SA Retail
and 31 December 2006 for SA Corporate, adjusted to
take into account the latest property valuations and
relevant consideration adjustment) multiplied by the
exchange ratio of 3,05.
3. The "cash offer" information is calculated as
follows:
EPLU, HEPLU and Distributions for the 12 months
ending 31 December 2007 based on the 9% interest (in
terms of the Offer) from 1 October 2006 to 30 April
2007 and then assuming that the proceeds of R10,50
are invested in listed property generating a yield of
5,96% (being the J253 dividend yield as at the last
practicable date) from May to December 2007.
Market value, NAV and NTAV are based on the cash
offer price of R10,50.
5. Circular regarding the Offer
A circular, providing information on the Offer and incorporating
a form of acceptance, surrender and transfer has been
posted to SA Retail linked unitholders today, Wednesday,
28 March 2007.
The circular is available in English only, and copies may be
obtained from the registered offices of SA Retail and
Nedbank Capital.
6. Withdrawal of cautionary announcement
SA Retail linked unitholders need no longer exercise caution when
dealing in their SA Retail linked units.
Durban
28 March 2007
Investment bank and sponsor to SA Corporate
Nedbank Capital
Corporate law advisor to SA Corporate
Jowell Glynn & Marais
Independent reporting accountants and independent expert to SA
Retail
KPMG
Independent reporting accountants to SA Corporate
Deloitte & Touche
Sponsor to SA Retail
Exchange Sponsors
Independent expert to SA Corporate
Deloitte & Touche Corporate Finance
Date: 28/03/2007 15:56:03 Produced by the JSE SENS Department.
