| Wed 11 Aug 2010, 9:55 | | RDF - Redefine Properties Limited - Breaking News - Why Redefine Unitholders |
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RDF - Redefine Properties Limited - Breaking News - Why Redefine Unitholders
should vote yes for Hyprop transaction
REDEFINE PROPERTIES LIMITED
(formerly Redefine Income Fund Limited)
(Registration No. 1999/018591/06)
Share Code: RDF ISIN Code: ZAE000143178
("Redefine")
BREAKING NEWS - WHY REDEFINE UNITHOLDERS SHOULD VOTE YES FOR HYPROP TRANSACTION
The following information has been distributed by Redefine as part of its
Breaking News updates:
What we stand to gain if unitholders vote YES:
Effects on Redefine`s distributions
If Redefine receives approval from its unitholders to acquire the Hyprop units
from Coronation, Redefine will earn R5,55 in respect of these units in the 2011
financial year. This includes a distribution of R1,80 for the period 1 January
2010 to 30 June 2010, and a distribution of R3,75 for the period 1 September
2010 to 31 August 2011.
The cost of funding of the Hyprop units being acquired from Coronation at an
interest rate of 8,8% is R4,40 per unit.
Therefore, the net gain to Redefine is R22,6-million, which translates to 0,84
cents per Redefine unit in 2011.
In 2012, the forecast distribution is R4,26 and once funding costs have been
taken into account, distributions will be diluted by R2,8-million, which
translates to a mere 0.001 cents per linked unit.
These estimates are based on publicly available information (including guidance
published by Hyprop and analysts reports) and Redefine`s assessment of current
and anticipated market conditions. The actual amount of the distributions will
depend upon Hyprop`s results during the period in question.
Control premium
Redefine is not likely to acquire more than between 45% - 46% of Hyprop.
Redefine could command R54/share, and with a control premium, this could well be
in the region of R56/share. If Redefine were to dispose of its holdings in
Hyprop with the "control premium", this would lead to a profit on the ex-
Coronation units of R118-million.
The disposal of Redefine`s holdings in Hyprop with the "control premium" would
value Redefine`s total holdings in Hyprop at R4,2 billion. Redefine would be
disposing of the Hyprop holding at a yield of approximately 6.5% and the
proceeds could be utilised to repay debt at 9% or to acquire higher yielding
assets with potentially greater growth prospects.
What we stand to lose if unitholders vote NO:
If Redefine is compelled to sell the 19 686 558 Hyprop units acquired from
Coronation, the Hyprop price will in all probability drop and this could mean a
loss to Redefine.
If Redefine does not acquire any further Hyprop and retains its holding at
33,3%, there would be no control premium.
The preliminary costs of the transaction incurred by Redefine, including fees
payable to the funding banks are R33,8-million. The fee would have to be written
off and if the Hyprop units are not acquired there would be no assets against
the fee which would significantly affect Redefine`s distributions.
A brochure outlining the benefits of voting YES and the circular and proxy form
may be downloaded from the Redefine website, www.redefine.co.za.
11 August 2010
Sponsor
Java Capital
Date: 11/08/2010 09:55:01 Produced by the JSE SENS Department.
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