| Wed 24 Mar 2010, 8:56 | | RDF - Redefine Properties - Agreement to Acquire an Additional Stake in |
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RDF - Redefine Properties - Agreement to Acquire an Additional Stake in
Hyprop Investments Limited ("Hyprop") and Withdrawal of Cautionary
Redefine Properties Limited
(formerly Redefine Income Fund Limited)
(Registration No. 1999/018591/06)
Share Code: RDF & ISIN Code: ZAE000143178
("Redefine")
AGREEMENT TO ACQUIRE AN ADDITIONAL STAKE IN HYPROP INVESTMENTS LIMITED
("HYPROP") AND WITHDRAWAL OF CAUTIONARY
INTRODUCTION
Redefine unitholders are referred to the cautionary announcement dated
1 March 2010 and are advised that Redefine has concluded an agreement with
Coronation Asset Management ("Coronation") to acquire an additional
19,686,558 Hyprop units (the "Sale units") for an aggregate consideration of
R984,327,900, being R50 per Sale unit ("the acquisition").
On implementation, the acquisition will increase Redefine`s stake in Hyprop
from 33.3% to 45.2%. The implementation of the acquisition will trigger a
mandatory offer (the "mandatory offer") by Redefine to all Hyprop unitholders
at a price of R50 per unit.
RATIONALE FOR THE ACQUISITION
Redefine currently has a significant stake in Hyprop and has played an
integral role in its growth, acquisitive strategy and strategic management.
The acquisition represents an opportunity for Redefine to meaningfully
increase its holding in Hyprop and together with the mandatory offer should
result in Redefine being in a position to exercise control over Hyprop.
The purchase price of R50 per unit is expected to be marginally dilutionary
for Redefine for the year ending 31 August 2010. However while the portion
of the Hyprop distribution for the six months to 30 June 2010 (the "2010
distribution") received on the Sale units which relates to the period prior
to the acquisition of such units cannot be included in Redefine`s net income
from an accounting perspective, it will be included in Redefine`s
distribution in the period in which the 2010 distribution is received.
Accordingly the acquisition is anticipated to be slightly enhancing for
Redefine for the year ending 31 August 2011 but may be marginally dilutionary
thereafter.
Redefine will canvass Hyprop unitholders in relation to the mandatory offer
and, if it receives sufficient indications of support, may consider proposing
a scheme of arrangement in terms of section 311 of the Companies Act to
acquire 100% of the Hyprop units not already owned by Redefine at a price of
R50 per unit.
TERMS OF THE ACQUISITION
The Sale units are being acquired with effect from 19 March 2010 ex the
entitlement to Hyprop`s income distribution for the six months ended 31
December 2009.
The acquisition is conditional on the approval by 31 August 2010 of:
- the South African Competition Authorities; and
Redefine unitholders,
- both for the acquisition (which would not on its own require Redefine
unitholder approval) and for the mandatory offer.
Coronation retains full beneficial ownership of the Sale units, including the
right to vote the Sale units, until the conditions are fulfilled.
The purchase price has been funded by way of a term loan facility from Rand
Merchant Bank and has been paid to Coronation in anticipation of the
conditions being fulfilled. If the conditions are not timeously fulfilled
Redefine is obliged to procure one or more purchasers for the Sale units and
has indemnified Coronation against any loss it may suffer in this regard. The
effect of the indemnity is that if the purchaser/s procured by Redefine pay
less than R50 per Sale unit Redefine will pay the shortfall to Coronation. If
the purchaser/s pay more than R50 per Sale unit, Redefine will be entitled to
the surplus.
FURTHER DOCUMENTATION AND WITHDRAWAL OF CAUTIONARY
The acquisition is a category 3 transaction in terms of the JSE Listings
Requirements and does not require Redefine unitholder approval. However the
mandatory offer that will be triggered by the acquisition will constitute a
category 1 transaction and will require the preparation of a circular to
Redefine unitholders and the approval of Redefine unitholders. This circular
will be prepared and circulated to Redefine unitholders in due course. The
cautionary announcement dated 1 March 2010 is hereby withdrawn.
24 March 2010
Corporate advisor, legal advisor and sponsor
Java Capital (Proprietary) Limited
Date: 24/03/2010 08:56:23 Produced by the JSE SENS Department.
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