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DIV
DIV
DIV - Diversified - Acquisition of Property Fund Managers Limited
Diversified Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2005/029685/06
Share code: DIV & ISIN: ZAE000072369
("Diversified" or "the company")
ACQUISITION OF PROPERTY FUND MANAGERS LIMITED
INTRODUCTION
Linked unitholders are advised that Diversified has entered into an agreement to
acquire 100% of the issued share capital of Property Fund Managers Limited
("PFM") from a subsidiary of Resilient Property Income Fund Limited
("Resilient") "share sale agreement"), as well as the asset management agreement
between PFM and Resilient Properties (Pty) Limited ("ResProp").
BACKGROUND TO PFM
PFM is the management company appointed to manage Capital Property Fund, a
Collective Investment Scheme in property registered as such in terms of the
Collective Investment Schemes Control Act, No. 45 of 2002 ("CISC Act")
("Capital"). PFM`s income stream is generated from management fees and initial
charges as defined in the Capital trust deed. PFM is responsible for the
management of the Capital portfolio and the costs associated therewith. PFM
entered into an asset management agreement with ResProp in terms of which
ResProp assumed full responsibility for the management of Capital`s portfolio in
exchange for a service fee and initial charge, on the same basis applicable to
PFM in terms of the trust deed.
RATIONALE FOR THE ACQUISITION
The acquisition grows the financial services business of Diversified.
PURCHASE CONSIDERATION AND FINANCIAL EFFECTS
The purchase consideration is R 30 million payable in cash and will be funded
from existing loan facilities. The acquisition has no material effect on
earnings per linked unit, headline earnings per linked and distribution per
linked unit for the six months ended 31 December 2006, and net asset value per
linked unit and net tangible asset value per linked unit as at 31 December 2006
and these effects are therefore not disclosed.
CONDITION
The share sale agreement includes a condition in respect of Financial Services
Board approval under the CISC Act.
FAIR AND REASONABLE
The transaction is deemed to be a `small related party` transaction as per
section 10 of the JSE Listing Requirements. Grindrod Bank Limited, acting as
independent expert, assessed the terms and conditions of the transaction and
found to be it fair and reasonable to linked unitholders of Diversified. The
fair and reasonable opinion has been lodged with the JSE Limited and will be
available for inspection upon receipt of their approval.
Johannesburg
8 August 2007
Sponsor
Java Capital (Proprietary) Limited
Independent Expert
Grindrod Bank Limited
Date: 08/08/2007 14:27:27 Produced by the JSE SENS Department.
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