| Mon 11 Jun 2007, 13:09 | | ABT - Ambit Properties Limited - Detailed Cautiona |
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ABT
ABT
ABT - Ambit Properties Limited - Detailed Cautionary Announcement
AMBIT PROPERTIES LIMITED
(Registration number: 2001/007003/06)
Share code: ABT
ISIN code: ZAE000051645
("Ambit" or "the Company")
DETAILED CAUTIONARY ANNOUNCEMENT
Introduction
Linked unitholders are referred to the cautionary announcement dated 8 May 2007
and are advised that Ambit has entered into agreements with the parties set out
in table 1 below ("Sellers") to acquire five office buildings and their related
rental enterprises, details of which are provided in table 2 below ("the
portfolio"), for a total purchase price of R690 million plus acquisition costs
of R8.4 million ("the acquisitions"). The effective dates of the acquisitions
are the dates of transfer of the respective properties into the name of Ambit,
which is expected to be completed during the third quarter of 2007.
Table 1: The Sellers
Business Venture Investments 823 In its capacity as general partner of
(Proprietary) Limited the African Alliance Property
Partnership No 1 En Commandite
Partnership
Marble Gold 368 (Proprietary) In its capacity as general partner of
Limited the African Alliance Property
Partnership No 2 En Commandite
Partnership
Cape Horizon Properties 108 In its capacity as general partner of
(Proprietary) Limited the African Alliance Property
Partnership No 3 En Commandite
Partnership
Ferris Wheel Trading 27 In its capacity as general partner of
(Proprietary) Limited the African Alliance Property
Partnership No 4 En Commandite
Partnership
Business Venture Investments 990 In its capacity as general partner of
(Proprietary) Limited the Mineralia Property En Commandite
Partnership
The partnerships referred to above include amongst others Cape Empowerment Trust
Limited ("CET") a Black Economic Empowerment ("BEE") company listed on the JSE
Limited ("JSE") and two previously disadvantaged individuals who collectively
will be issued with approximately 80% of the units to be issued in this
transaction. All the Sellers referred to above have warranted that they are not
related parties as defined in Section 10 of the JSE Listings Requirements.
Details of the portfolio
The portfolio consists of five office builidngs with a total rentable area of 83
611m2 . The Department of Public Works and Absa Bank Limited are the major
occupiers of the portfolio, occupying 57,736m2 (69%) on long leases. The
portfolio is expected to provide a net forward yield of 9%.
The salient features of the respective properties are as
follows:
Table 2: Property descriptions
Physical Address Rentable Price
Area m2 R million
Erf 4736, Corner of De Korte and De 13 391 91.0
Beer Streets, Braamfontein
Erf 1165 and 1266, Corner of 9 315 63.5
Marshall and Sauer Streets, and the
parking garage off Anderson Steet,
Johannesburg
Portion 10 of erf 623, 1006 Lenchen 6 394 35.5
Avenue, North Centurion
Erf 172, Martin Hammerschlag Way, 26 561 280.0
Roggebaai
Erf 1117, Corner of Eloff, Main and 27 950 220.0
Fox Streets, Johannesburg
83 611 690.0
Rationale for the acquisitions
Ambit`s strategy as published in its 2006 Annual Report is to increase its
property portfolio to in excess of R1.5 billion and its market capitalisation to
in excess of R1 billion during 2007. In addition, Ambit`s Board is committed to
address the Property Charter in both a responsible and meaningful way. The
acquisitions ensure that the objectives are met and of significant importance is
the fact that, as a direct result of the acquisitions, CET will become a 23.8%
unitholder in Ambit. The total BEE unitholding in Ambit will increase to 36.1%.
It is the intention for CET to also acquire a minimum stake in Ambit Management
Services (Pty) Ltd ("AMS") of 22% with an option to increase to 26%. AMS acts
as asset and property manager and undertakes the accounting and reporting for
Ambit. AMS is currently 100% owned by Absa Bank Limited.
Consideration for the acquisitions
The consideration for the acquisition of the portfolio will be settled by way of
an issue of 186 486 487 linked units in Ambit to the Sellers, at an issue price
of 370 cents per linked unit. This price was derived from the 30 day volume
weighted average traded price on 20th April 2007 being the date on which the
broad parameters of the acquisition were established. From this was deducted an
allowance for the half year distribution which has been paid in June and in
recognition of the BEE status of the majority of the sellers (approx 80%) the
price was discounted by 7.5%. Since then, and in line with the Listed Property
sector as a whole, the price of the linked units has risen and accordingly the
Sellers have agreed not to trade 75% of the linked units they will receive as
consideration, for a period of three years. The Sellers will pay for the pro
rata second half year distribution from 1st April 2007 to the date of transfer
of the properties.
The portfolio has been valued by CB Richard Ellis and Africa Corporate Real
Estate Solutions, both independent valuers, details of which will be published
in the detailed announcement and circular to linked unitholders.
Conditions precedent
The acquisition of the portfolio will be subject to, inter alia:
* the approval of the JSE and, to the extent necessary, the Securities
Regulation Panel ("SRP");
* the waiver, by the majority of linked unitholders, of the obligation of the
Sellers to make a mandatory offer, as provided for under Rule 8.7 of the
The Securities Regulation Code and Rules of the SRP ("the Code");
* the necessary approvals of the acquisitions by the requisite majority of
Ambit`s linked unitholders in general meeting;
* the approval of the competition authorities; and
* listing of the linked units to be issued in terms of this transaction.
Financial information and renewal of cautionary
A further announcement will be made in due course providing the financial
effects of the acquisition on Ambit`s net asset value per linked unit, the
forecast information in respect of the acquired assets for the 3 months from 1
July 2007 to 30 September 2007 as well as for the 12 months from 1 October 2007
to 31 September 2008.
Accordingly, linked unitholders are advised to continue exercising caution when
dealing in the linked units of Ambit until such announcement is made.
Documentation
The acquisition has been classified as a Category 1 transaction in terms of the
Listings Requirements of the JSE and is an affected transaction in terms of the
Code. Accordingly, the Company will in due course post a circular to linked
unitholders incorporating revised listing particulars and a notice convening a
general meeting at which the linked unitholders will be requested, amongst other
resolutions, to waive the requirement for a mandatory offer.
Johannesburg
11 June 2007
Corporate advisor:
ABSA CAPITAL
Sponsor:
EXCHANGE SPONSORS (PTY) LIMITED
Attorneys:
CLIFFE DEKKER INC
Auditors and Reporting Accountants:
DELOITTE
Date: 11/06/2007 13:09:32 Produced by the JSE SENS Department.
