| Wed 18 Nov 2009, 17:07 | | FVT - Fairvest Property Holdings - Initial response to the offer by Rossouw En |
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FVT
FVT
FVT - Fairvest Property Holdings - Initial response to the offer by Rossouw En
Van Der Westhuizen (Proprietary) Limited
FAIRVEST PROPERTY HOLDINGS LIMITED
Incorporated in the Republic of South Africa
(Registration number 1998/005011/06)
Share code: FVT ISIN: ZAE000034658
("Fairvest" or "the company")
INITIAL RESPONSE TO THE OFFER BY ROSSOUW EN VAN DER WESTHUIZEN (PROPRIETARY)
LIMITED
Linked unitholders are referred to the announcement published in the Business
Day on Monday, 16 November 2009 wherein linked unitholders were advised that
Rossouw en Van der Westhuizen (Proprietary) Limited ("Offeror"), together with
other parties who are acting in concert with the Offeror ("concert parties"),
will make an offer to acquire all or any of the Fairvest linked units held by
linked unitholders for an offer consideration of 110 cents per linked unit
("Offer").
The board of directors of Fairvest (excluding Mr Jacques du Toit who is the sole
director of the Offeror, and a trustee and a director of the concert parties)
("Fairvest directors") advise that they were only notified on Friday, 13
November 2009 of the Offeror`s intention to make the offer to Fairvest linked
unitholders, as announced in the Business Day.
As required by the Securities Regulation Panel, the Fairvest directors are
currently in the process of preparing a circular ("the Fairvest board circular")
to linked unitholders which will incorporate their views on the Offer,
appropriate external advice on whether the Offer is fair and reasonable to
linked unitholders and commentary on the statements set out in the circular
issued by the Offeror dated 17 November 2009 ("offer circular").
Linked unitholders are advised not to accept the Offer until they have received
the Fairvest board circular and are able to make an informed decision, having
had an opportunity to review the Fairvest directors` view in respect of the
Offer and the fair and reasonable opinion currently being prepared by the
external adviser. The Fairvest directors` preliminary view is that the Offer has
not been made with the best interests of linked unitholders in mind. This view
is based on the fact that:
* the net asset value of Fairvest is supported by cash and investment
properties. There is no existing long-term debt or intangible assets. These
investment properties are independently valued annually at financial year
end with their current values taking cognisance of the prevailing economic
conditions;
* the Offer is at a 27% discount to the net asset value per linked unit of
Fairvest which is 151.6 cents per linked unit as reported in Fairvest`s
unaudited interim results for the six months ended 30 September 2009
("interim results");
* one of the methods that the Offeror believes can be used to manage
Fairvest`s assets more effectively is by realising the current portfolio.
This has already been undertaken by Fairvest with regards to
underperforming properties. Therefore, the remaining property portfolio,
which the Offeror is proposing to sell, is fairly valued with minimal
downside risk and good growth potential;
* the Debenture Trust Deed states that 99.9% of profits are attributable to
debenture holders. There are earnings of approximately 5 cents per linked
unit, as disclosed in Fairvest`s interim results, which have accrued to
debenture holders. The company, as disclosed in its interim results, only
declares interest distributions and dividends annually and not at the
interim stage. Therefore, it is the opinion of the Fairvest directors that
the effective offer price, once the interest distribution of approximately
5 cents which has been earned by linked unitholders is stripped out, is 105
cents; and
* the offer circular states that an offer of 110 cents per linked unit is at
a 6.8% premium to the 30 day volume weighted average price of 103 cents per
linked unit as at 31 October 2009. The 30 day volume weighted average price
of Fairvest linked units as at 16 November 2009 is 112.8 cents. Therefore,
the offer price of 110 cents is at a discount of 2.5% to the current volume
weighted average price while the effective offer price of 105 cents, as
described above, is at a 6.9% discount.
The Fairvest directors accept responsibility for the information contained in
this announcement and to the best of their knowledge and belief (having taken
all reasonable care to ensure that such is the case) the information contained
in this announcement is in accordance with the facts and does not omit anything
likely to affect the import of the information contained in this announcement.
The Fairvest board circular is expected to be issued on or about 30 November
2009.
Durban
18 November 2009
Sponsor
Merchantec Capital
Date: 18/11/2009 17:07:01 Produced by the JSE SENS Department.
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