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CBS
CBS
CBS - CBS Property Portfolio Limited - Acquisition of 54% undivided interest in
The Wedge
CBS Property Portfolio Limited
(Incorporated in the Republic of South Africa)
(Registration number 2003/009523/06)
Share code: CBS & ISIN: ZAE000073995
("CBS")
ACQUISITION OF 54% UNDIVIDED INTEREST IN THE WEDGE
1. INTRODUCTION
CBS linked unitholders are advised that CBS has concluded an agreement with
Vinella Investments (Proprietary) Limited ("Vinella") to acquire the 54%
interest in the Wedge that it does not already own (the "proposed
acquisition").
The purchase consideration for the proposed acquisition is R134 179 993.30
(the "purchase consideration").
2. the proposed acquisition
2.1 Rationale and Salient Details
CBS` objective is to offer growth in income and capital over the
medium to long term. In doing so CBS seeks acquisition opportunities
which will enhance the quality of the existing CBS property portfolio
as well as its long-term sustainable growth in distributions to linked
unitholders. CBS also seeks to maintain its exposure to a sectorally
well-balanced, geographically diversified property portfolio. The
board of directors of CBS ("the board") are of the opinion that the
proposed acquisition is in line with such investment criteria
The Wedge consists of premium A-grade quality retail property situated
in the upmarket area of Morningside, Sandton. The Wedge has an
attractive mix of tenants
The effective date of the proposed acquisition is 1 June 2007 ("the
effective date").
Property Vendor Property Purchase Weighted Area in
Location Price average Sq. m.
R rental (54%)
Millions per Sq.m.
(Rand)
The Wedge Vinella Erf 940 134.179 7 628
Investments Morningside
(Proprietary) Extension 94
Limited Township 120.36
2.2 Purchase Consideration
It is intended that the purchase consideration of R134 179 993.30 is
to be settled in cash.
The purchase consideration will be increased by 2.5% per annum pro-
rated daily for each year or portion of each year between the
effective date and the date of transfer of the properties ("the
purchase price adjustment"). CBS will also be required to pay interest
to Vinella on the purchase consideration (including the amount by
which the purchase consideration is increased pursuant to the purchase
price adjustment, calculated at the Prime Rate, determined from the
effective date to the date of payment.
The transfer date of the properties and payment date is anticipated to
be in early August when approval from the Competition Authorities is
expected to be received.
Valuations on the abovementioned properties have been performed by the
directors of CBS in determining the purchase consideration.
3. Conditions
The proposed acquisition is subject, inter alia, to the following
suspensive condition:
3.1 obtaining the necessary approval of the Competition Authorities.
4. financial information FOR THE PROPOSED ACQUISITION
The financial effect of the proposed acquisition on CBS`s net asset value
per linked unit has not been disclosed as the effect is not material. Pro
forma forecast information for the 12 months ending 31 October 2008 is set
out below. The Pro forma forecast financial information is the
responsibility of the directors and has been prepared for illustrative
purposes only, and because of its nature, it may not fairly present CBS`
financial position, changes in equity, results of operations or cash flows.
Rand million Before Proposed After
proposed acquisition proposed
acquisition acquisition
31 October 31 October
2008 2008
Forecast revenue 292 13 305
Operational net income 211 11 222
Finance costs (44) (13) (55)
Interest Paid to debenture 167 167
holders -
Profit after tax - (3)
(2)
Linked units in issue after 193 214 169 - 193 214 169
proposed transaction
Distribution per linked unit 86.37 85.09
(1.28)
The position shown under "Before proposed acquisition" is based on the
unaudited profit forecast for the year ended 31 October 2008, which was
included in the circular posted to CBS linked unitholders on 22 December
2006.
The proposed acquisition is to be funded from existing CBS debt facilities
at the weighted average cost of funding after the proposed acquisition of
10.11%.
Cape Town
26 June, 2007
Investment bank Sponsor Legal adviser
(Investec Corporate Finance) (Investec Bank Limited) (Jowell Glyn Marais)
Date: 28/06/2007 09:07:01 Produced by the JSE SENS Department.
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