| Tue 21 Dec 2010, 8:55 | | HYP - Hyprop Investments Limited - Acquisition of Attfund Retail and renewal of |
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HYP
HYP
HYP - Hyprop Investments Limited - Acquisition of Attfund Retail and renewal of
cautionary announcement
Hyprop Investments Limited
(Incorporated in the Republic of South Africa)
Registration number 1987/005284/06
Share code: HYP ISIN: ZAE000003430
("Hyprop")
ACQUISITION OF ATTFUND RETAIL AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Combined unitholders are referred to the cautionary announcement dated 6
December 2010 and are advised that formal agreements have now been concluded
regulating the terms of the offer (the "offer") which will be made by Hyprop to
acquire 100% of the shares in Femtoworx Limited (in the process to being renamed
Attfund Retail Limited) ("Attfund Retail"), for the purpose of acquiring Attfund
Retail`s portfolio of property assets and listed securities.
RATIONALE
The offer provides Hyprop with an unique opportunity to acquire a large, well
managed, retailed focused portfolio that is compatible with Hyprop`s existing
portfolio on a yield enhancing basis. The acquisition of the Attfund Retail
portfolio will increase Hyprop`s portfolio to 22 properties with a gross value
of approximately R20 billion, almost doubling its size while enabling it to
retain its retail focus.
The implementation of the offer will further strengthen Hyprop`s management team
through the addition of Attfund Retail`s centre management and corporate
management teams. In addition Hyprop will benefit from the expertise and
experience of Louis Norval and Louis van der Watt who, subject to the necessary
combined unitholder approval, will become non-executive members of the Hyprop
board once the offer is implemented.
TERMS OF THE OFFER
In terms of the offer, Hyprop will acquire 100% of the issued share capital of
Attfund Retail for an aggregate effective consideration of R8.986 billion less
the value of Attfund Retail`s debt as at the effective date of the offer. The
offer consideration will be discharged as follows:
- R6.048 billion by the issue of 112 million0 Hyprop combined units at R54
per unit (the "consideration units"); and
- the balance in cash.
The effective date of the offer will be the first business day of the month
immediately following the fulfilment of the last of the conditions
precedent and the consideration units will be issued ex the entitlement to
receipt of a special Hyprop distribution for the period from 1 January 2011
until the day before the effective date.
As soon as practical after the implementation of the offer, Attfund Retail`s
assets will be transferred to Hyprop. After the implementation of the offer
Attfund Retail`s articles of association will be amended to conform with the JSE
Listings Requirements.
The offer remains conditional on:
- the implementation of the various transactions in terms of which Attfund
Retail will acquire its property assets and listed securities from Attfund
Limited and various other vendors (the "Attfund Retail restructure");
- the offer being accepted by sufficient Attfund Retail shareholders to
enable Hyprop to invoke the provisions of section 440K of the Companies Act
in order to acquire 100% of the Attfund Retail shares in issue (in this
regard parties who will, on the implementation of the Attfund Retail
restructure, hold approximately 86% of the issued share capital of Attfund
Retail have irrevocably undertaken to accept the offer);
- receipt of all combined unitholder and regulatory approvals required to
implement the offer and receipt of tax opinions or rulings satisfactory to
the parties confirming that the implementation of the offer and related
transactions will not have unduly adverse tax consequences for Hyprop;
- receipt of consent from Attfund Retail`s facility providers to the transfer
of Attfund Retail`s debt facilities to Hyprop;
- receipt of certain irrevocable undertakings from Hyprop combined
unitholders to vote in favour of the resolution required to increase the
authorised and issued share capital of Hyprop in order for Hyprop to be in
a position to issue the consideration units.
On implementation of the offer the Attfund Retail shareholders will pay a R130m
transaction fee to Redefine Properties Limited ("Redefine"). The fee will be
settled out of the cash portion of the consideration. The payment of the fee by
the Attfund Retail shareholders will be subject to approval of an independent
majority of Hyprop unitholders, failing which no fee shall be payable to
Redefine.
THE PLACEMENT
As a term of the offer, Attfund Retail shareholders are required to place 50
million of the consideration units (the "placement units") for cash (the
"placement"). The placement will be undertaken jointly by Attfund Retail, Hyprop
and their respective advisers. Hyprop has undertaken to underwrite the placement
on the basis that if any of the placement units are not placed during an initial
60 day period commencing on the effective date at a price of at least R54 per
unit, Hyprop will:
- make up the difference in cash; or
- repurchase the consideration units in question at a price that results in
the Attfund Retail shareholders receiving a price of R54 for every unit not
placed.
Should the Attfund Retail shareholders elect not to place the full 50 million
placement units during the placement period then they shall have a further 150
day period in which they will be required to place the balance of the placement
units, provided that Hyprop shall not underwrite the placement of the units
during this additional period.
Louis Norval has undertaken to retain a beneficial interest in at least 5
million consideration units for a period of at least three years from the
effective date or until either he or Louis van der Watt ceases to be a member of
the Hyprop board (other than as a result of their voluntary resignation).
THE GARDEN ROUTE TRANSACTION
On the effective date, Attfund Retail`s assets will include 100% of Garden Route
Mall which will be held by (or which will be transferred shortly after the
effective date to) a wholly-owned subsidiary of Attfund Retail ("Subco").
In terms of agreements concluded between Hyprop, Atterbury Investment Holdings
Limited ("AIH") and Attfund Retail AIH will, after the implementation of the
offer, acquire an 80% interest in Subco for R710.4 million (being 80% of the
R888 million attributed to the Garden Route Mall in terms of the offer).
AIH shall have an option to acquire the remaining 20% in Subco after the second
anniversary of the effective date, at a purchase price (the "option price")
equivalent to their market value (as determined by an independent valuer). As
part of these agreements, AIH has guaranteed Hyprop, that the income it will
earn off its investment in the Garden Route Mall during the 2 year option period
will be not less than 8.5% of its effective cost of R177.6 million per annum and
that the option price will not be less than R199 million.
THE ATTFUND RETAIL ASSETS
On the implementation of the offer and the Garden Route transaction, Attfund
Retail`s property portfolio will comprise Atterbury Value Mart; Cape Gate Retail
precinct; Clearwater Mall; Somerset Value Mart; Willow Bridge Lifestyle and
Value Centre; Woodlands Boulevard; a 25% undivided share in Centurion Mall; a
20% indirect share in Garden Route Mall; Glenfield Office Park; Glenwood Office
Park and Lakefield Office Park. In addition Attfund Retail will own 8 897 297
Sycom units, 2 610 430 Acucap units, the asset management business of Attfund
Retail (previously owned by Parkdev) and 100% of the shares in Word 4 Word
Marketing (Proprietary) Limited.
The property specific information required in terms of the JSE Listings
Requirements in relation to Attfund Retail`s property portfolio is set out
below.
No Property Name Physical Address Rentable Weighted
Area average
(mSquared) gross
rental per
m2
1 Cape Gate Cnr Okavango and De Bron 106 127 R101.24
Retail Roads, Brackenfell, Cape
Precinct Town
2 Atterbury Atterbury Road, Faerie 47 712 R123.55
Value Mart Glen, Pretoria
3 Clearwater Cnr Christiaan de Wet and 85 197 R167.76
Mall Hendrik Potgieter Roads,
Roodepoort
4 Centurion Mall Heuwel Avenue, Centurion, 109 420 R138.19
(25% undivided Gauteng (100%)
share)
5 Glenwood Cnr Oberon and Sprite 3 415 R123.24
Office Park Avenue, Faerie Glen,
Pretoria
6 Glenfield Cnr Oberon and General 10 359 R126.28
Office Park Louis Botha Streets,
Faerie Glen, Pretoria
7 Somerset Value N1 Somerset West offramp 12 571 R90.48
Mall
8 Lakefield Cnr Lechen and West 15 261 R98.63
Office Park Avenue, Centurion
9 Woodlands Garsfontein Road and De 70 164 R138.70
Boulevard Villebois Mareuil Drive,
Pretoria East
10 Willow Bridge 47 Tyger Valle Road, 47 707 R98 51
Lifestyle and Bellville
Value Centre
11 Garden Route Confluence N2 Highway & 53 557 R110.32
Mall (20% Knysna Road, (100%)
undivided George
share)
Other than in respect of the Garden Route Mall, the offer consideration has not
been specifically allocated to the individual properties within the property
portfolio. The properties in the portfolio will be independently valued as at 31
December 2010 and details of those valuations will be included in the circular
to be sent to Hyprop combined unitholders in relation to the offer.
FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY
The forecast financial information in relation to Attfund Retail together with
the pro forma historical financial effects of the offer are still in the process
of being finalised and will be published in due course. Hyprop unitholders are
advised to continue exercising caution when trading in their securities until
that announcement is made.
Johannesburg
21 December 2010
Sponsor, corporate advisor and legal advisor to Hyprop
Java Capital
Legal advisor to Attfund Retail
Edward Nathan Sonnenbergs Inc.
Date: 21/12/2010 08:55:01 Produced by the JSE SENS Department.
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