| Thu 15 Jan 2009, 13:00 | | RDF/APA/APB/AXC/MDN - Redefine/ApexHi/Madison - Redefine`s Firm Intention To |
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APA MDN RDF APB AXC
APA MDN RDF
RDF/APA/APB/AXC/MDN - Redefine/ApexHi/Madison - Redefine`s Firm Intention To
Offer To Acquire Apexhi Linked Units And Madison Linked Units And Cautionary
Announcements
Redefine Income Fund Limited
(Registration No. 1999/018591/06)
Share Code: RDF
ISIN Code: ZAE000023503
("Redefine")
ApexHi Properties Limited
(Incorporated in the Republic of South Africa)
Registration number 1999/000238/06
Share codes: APA ISIN codes: ZAE000083598
APB ZAE000083606
AXC ZAE000083580
("ApexHi")
Madison Property Fund Managers Holdings Limited
Registration No. 2003/021772/06
Madison Property Fund Managers Limited
Registration No. 2005/021874/06
Share Code: MDN
ISIN: ZAE000080560
("Madison")
REDEFINE`S FIRM INTENTION TO OFFER TO ACQUIRE APEXHI LINKED UNITS AND MADISON
LINKED UNITS AND CAUTIONARY ANNOUNCEMENTS
INTRODUCTION
Redefine has informed ApexHi and Madison of its firm intention, subject to
conditions set out below, to make offers (the "offers") to acquire ApexHi
linked units (other than those held by Redefine`s subsidiaries) (the "ApexHi
offers")and Madison linked units (the "Madison offer").
The offers will be on the basis of an all-unit consideration, entailing
ApexHi and Madison unitholders swapping their ApexHi or Madison units for
units in Redefine at the applicable swap ratios as set out below. In making
the offers, Redefine`s objective is to acquire all of the issued units of
ApexHi and Madison in order to effect a merger of the three companies (the
"merger"), alternatively, to acquire more than 50% of the issued units in
each of the three classes of units in issue by ApexHi and 100% of the issued
units of Madison (the "partial merger").
In order to effect the merger, the offers will be made pursuant to schemes of
arrangement (the "schemes") to be proposed by Redefine in terms of
section 311 of the Companies Act, No. 61 of 1973 (the "Act") between ApexHi
and its unitholders other than Redefine`s subsidiaries (the "ApexHi offerees"
in respect of the "ApexHi schemes")and Madison and its unitholders (the
"Madison offerees" in respect of the "Madison scheme").
Alternatively, in order to effect the partial merger, the Madison scheme and
any of ApexHi schemes that have become unconditional will stand and any of
the ApexHi offers that have not become unconditional pursuant to the ApexHi
schemes will be open for acceptance by ApexHi offerees, provided that after
acceptances Redefine holds more than 50% of the issued units in each of the
three classes of ApexHi units.
RATIONALE
A merger of the property portfolios of Redefine and ApexHi will result in
reductions in expenses and extraction of synergies and funding efficiencies,
while the merger with Madison will internalise the asset management skills,
intellectual capital and expertise of Madison in conformity with trends
internationally.
The enlarged Redefine would be expected to attract interest from a wider
group of investors, such as tracker funds and international investors, and to
have greater access to capital markets for funding at competitive rates based
on moderate debt and secure cash flows.
The market capitalisation of the enlarged Redefine and trading liquidity of
its issued units could result in a re-rating of Redefine with its forward
yield falling and its unit price increasing, following on its possible
inclusion in a number of stock exchange and property indices. The re-rating
is expected to be such that unitholders in Redefine, ApexHi and Madison will
all benefit as a result of the merger. In addition, the expected re-rating
and lower yield will position Redefine to make further revenue enhancing
acquisitions.
SWAP RATIOS FOR APEXHI UNITHOLDERS
The consideration to be offered by Redefine for ApexHi units (the "ApexHi
swap ratios") will be:
- 202 Redefine units for every 100 ApexHi A units;
- 246,8 Redefine units for every 100 ApexHi B units; and
- 104 Redefine units for every 100 ApexHi C units.
The ApexHi swap ratios have been determined on the basis that, immediately
prior to the operative date of the schemes, ApexHi will have 265 519 674 A
units, 237 338 559 B units and 272 450 134 C units in issue or to be issued
to meet outstanding options or subscription rights, excluding ApexHi units
held by Redefine`s subsidiaries.
SWAP RATIO FOR MADISON UNITHOLDERS
The consideration to be offered by Redefine for Madison units will be 90
Redefine units for every 100 Madison units (the "Madison swap ratio").
The Madison swap ratio has been determined on the basis that, immediately
prior to the operative date of the schemes, Madison will have 207 628 000
units in issue or to be issued to meet outstanding options or subscription
rights.
IMPACT OF THE MERGER ON DISTRIBUTIONS PER UNIT
The boards of Redefine, ApexHi and Madison estimate that income distributions
by the enlarged Redefine after the effective date of the merger would be 75
cents per unit for the twelve months to 30 June 2010, subject to no
unforeseen deterioration in prevailing circumstances. The forecasts on which
this estimate is based have not been reviewed and reported on by the auditors
of Redefine, ApexHi or Madison. The circulars to be posted to unitholders
will include details of these profit forecasts, reported upon by reporting
accountants, in compliance with JSE Listings Requirements and the SRP Code.
In addition, the circulars to be posted to unitholders will include the
requisite external advice and/or fairness statements.
EFFECTIVE DATE AND IMPACT OF THE MERGER ON INCOME DISTRIBUTIONS
The effective date of the acquisition of Madison and ApexHi units by Redefine
will be 1 June 2009 (the "effective date"). Accordingly, in the event of
implementation of the merger or partial merger:
- each of Redefine, Madison and ApexHi will have made a special income
distribution in respect of income periods ending immediately prior to
the effective date, for the benefit of their respective unitholders
registered as such on the effective date; and
- income distributions by Madison in respect of all income periods
commencing from the effective date will be for the benefit of Redefine;
- income distributions by ApexHi in respect of all income periods
commencing from the effective date will be for the benefit of Redefine
and, in the event of the partial merger, such other ApexHi unitholders
who did not accept the ApexHi offer; and
- Madison and ApexHi unitholders who have accepted the offers will receive
Redefine units in time to participate in Redefine income distributions
for income periods commencing from the effective date.
CONDITIONS
The offers and the merger are subject to fulfilment or, where appropriate,
waiver of the following conditions precedent:
- the requisite approvals of Redefine`s unitholders and debenture trustee
including:
- for the proposed acquisitions of ApexHi and Madison units,
- for an increase in the authorised share capital of Redefine to 3,5
billion units;
- placing Redefine`s unissued shares under the control of its board
of directors;
- authorising the Redefine board to issue Redefine units in
settlement of the consideration for the offers;
- all necessary regulatory and statutory approvals including the approval
of the JSE Limited and the Securities Regulation Panel and the
unconditional approval (or approval acceptable to Redefine) of the
Competition authorities for the acquisition by Redefine of control of
ApexHi and Madison;
- the High Court of South Africa authorising the convening of scheme
meetings of the three classes of ApexHi offerees and of Madison
offerees;
- each of the schemes being approved by a majority representing not less
than three fourths of the votes exercisable by the scheme members
present and voting either in person or by proxy at the scheme meeting in
question;
- the sanctioning of the schemes by the High Court; and
- registration of certified copies of the sanctioning Orders of Court by
the Registrar of Companies in terms of the Act.
The partial merger is subject to the same conditions, save for those relating
to the ApexHi schemes, and to fulfilment or waiver by Redefine of the
condition that there is sufficient level of acceptances of the ApexHi offers
that Redefine thereafter holds more than 50% of all three classes of units in
issue by ApexHi.
Conditions must be fulfilled no later than 30 June 2009 or such later date as
may be agreed to by Redefine.
DE-LISTINGS
In the event of the merger, Redefine will hold 100% of the issued units of
ApexHi and Madison, which will be de-listed from the JSE. In the event of the
partial merger, Redefine will hold 100% of the issued units of Madison and
may hold 100% of one or more classes of ApexHi units in issue, which will all
then be de-listed, and Redefine will hold more than 50% but less than 100% of
one or more classes of ApexHi units in issue, which class of ApexHi unit will
then remain listed, subject to compliance with the JSE Listings Requirements.
THE PARTIAL MERGER AS AN ALTERNATIVE TO THE APEXHI SCHEMES
If any of the ApexHi schemes as proposed is not supported by the requisite
majority of scheme members in question or, for any other reason, Redefine
cannot achieve its objective to acquire 100% of all three classes of ApexHi
units in issue, Redefine`s offer will nonetheless be open for acceptance by
those of the ApexHi offerees who wish to swap any class of ApexHi units for
Redefine units at the same applicable swap ratio and on the same basis,
subject to the additional condition that, after implementation of all the
offers, Redefine holds more than 50% of each of the three classes of ApexHi
units and 100% of the issued units of Madison. In the event of the partial
merger, the benefits of merging the Redefine and ApexHi portfolios may not
all be achievable.
EXTERNAL ADVICE AND THE VIEWS OF THE APEXHI AND MADISON BOARDS
The ApexHi and Madison boards will appoint independent advisors to provide
the boards with external advice as required in terms of the SRP Code. Subject
to this advice, the boards of ApexHi and Madison support Redefine`s proposal
of the offers and intend to recommend to their respective unitholders that
they approve the schemes and accept the ApexHi and Madison offers by
Redefine. The substance of the external advice and the views of the boards
will be set out in the circulars to be posted to ApexHi and Madison
unitholders.
RESPONSIBILITY STATEMENT UNDER THE SRP CODE
The information in this joint announcement is the responsibility of Redefine
and the directors of ApexHi and Madison. To the best of their knowledge and
belief (having taken all reasonable care to ensure that such is the case),
this announcement contains information that is in accordance with the facts
and does not omit anything likely to affect the import of such information.
FINANCIAL EFFECTS AND CAUTIONARY ANNOUNCEMENT
The financial effects of the merger have not been finalised and will be
published in due course. Pending further announcements, Redefine, ApexHi and
Madison unitholders are advised to exercise caution in dealing in their
securities.
FURTHER DOCUMENTATION
Within 45 days after the date of this announcement, the acquisition circular
will be posted to Redefine unitholders together with revised listings
particulars for Redefine and circulars containing full details of the ApexHi
offer and the Madison offer and of the schemes and notices of the scheme
meetings will be posted to Madison and ApexHi unitholders.
15 January 2009
Corporate advisor and legal advisor to Redefine
Sponsor to Redefine, ApexHi and Madison
Java Capital (Proprietary) Limited
Date: 15/01/2009 13:00:02 Produced by the JSE SENS Department.
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