| Thu 22 Mar 2001, 0:00 | | Metprol - Acquisition |
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Metboard Properties Limited
(Incorporated in the Republic of South Africa)
(Registration number 1998/005425/06)
("Metprol")
Acquisition by Metprol of a portfolio of properties from Old Mutual Life
Assurance Company (South Africa) Limited ( Old Mutual Life Assurance )
1. INTRODUCTION
Further to the cautionary announcement published in the press on Friday, 2
March 2001, Investec Bank Limited ( Investec ) is authorised to announce that,
subject to the fulfilment of the conditions precedent set out in paragraph 2.6
below, Metprol has entered into an agreement ( the acquisition agreement ) in
terms of which Metprol will acquire a portfolio of 24 properties ( the
properties ) from Old Mutual Life Assurance ( the acquisition ).
2. THE ACQUISITION
2.1 The properties
The properties comprise 24 properties which are mainly industrial properties
with a total lettable area of approximately 211 514m2 situated in Gauteng (19),
Western Cape (1) and KwaZulu Natal (4). Pursuant to the acquisition, the
Metprol property portfolio will consist of 146 industrial properties with a
book value of approximately R764,1 million and a total lettable area of
approximately 950 000m2.
2.2 Terms of the acquisition
In terms of the acquisition agreement, Metprol will acquire the properties for
a total purchase consideration of R195,650 million, which will be settled as
follows:
- R99,650 million by the issue of renounceable letters of allocation in respect
of 39 078 431 new Metprol linked units ( the new Metprol linked units ) at an
issue price of R2,55 per new Metprol linked unit which are to be issued to
institutional and private investors in terms of a vendor placing; and
- the balance of R96,000 million in cash, which will be funded via a loan from
Investec on the following terms:
Period 10 years
Interest rate 13,7% NACM fixed for the above period
Repayment Interest only for the above period
Security First mortgage bonds over the properties
2.3 Vendor
The vendor is Old Mutual Life Assurance, a wholly-owned subsidiary of Old
Mutual Plc.
2.4 Rationale for the acquisition
The board of directors of Metprol believes that the acquisition will be
beneficial to the business of Metprol, as well as to Metprol linked
unitholders, from a financial and operational perspective, for the following
reasons:
- the acquisition will significantly enhance the quality of the overall
property portfolio of Metprol. Since 1998, Metprol has acquired in excess of
100 properties (including the properties in respect of the acquisition), the
overall quality of which has transformed Metprol to a superior quality and
focused industrial property fund;
- Metprol will achieve enhanced critical mass from an operational perspective
and the increased size should lead to improved tradability of the Metprol
linked units on the JSE Securities Exchange South Africa ( the JSE ), making it
more attractive to investors; and
- the 10 year fixed funding from Investec, the terms of which are set out in
paragraph 2.2 above, together with the compounding effect of annual escalations
in the rentals receivable by Metprol in terms of the lease agreements in place
over the properties, is expected to provide long-term benefits to Metprol
linked unitholders.
2.5 Financial effects
The net asset value per Metprol linked unit at 30 September 2000 was 281,8
cents. The distribution per Metprol linked unit for the six months ended 30
September 2000 was 17,52 cents.
On the assumption that the acquisition had been in effect for the six months
ended 30 September 2000 and, taking into account the financial effects of the
acquisition by Metprol of a portfolio of properties from Old Mutual Life
Assurance and Barprop Limited in October 2000 ( the Old Mutual Life
Assurance/Barprop acquisition ), the acquisition would not have had a material
effect on the distribution per Metprol linked unit for the six months ended 30
September 2000.
On the assumption that the acquisition had been concluded on 30 September 2000
and, taking into account the financial effects of the Old Mutual Life
Assurance/Barprop acquisition, the acquisition would not have had a material
effect on the net asset value per Metprol linked unit at 30 September 2000.
2.6 Conditions precedent
The acquisition is subject to, inter alia, the fulfilment of the following
conditions precedent:
- obtaining the necessary regulatory approvals;
- approval in general meeting by the requisite majority of Metprol linked
unitholders of the resolution necessary to give effect to the acquisition; and
- the Committee of the JSE granting approval for the listing of the new Metprol
linked units.
3. GENERAL MEETING
A general meeting of Metprol linked unitholders will be held on or about
Wednesday, 18 April 2001 ( the Metprol general meeting ) for the purpose of
considering and, if deemed fit, passing with or without modification the
resolution necessary to give effect to the acquisition.
Old Mutual Nominees (Pty) Limited ( Old Mutual ) held 24% of the Metprol linked
units in issue at 16 February 2001. In terms of the Listings Requirements of
the JSE, Old Mutual is deemed to be a related party to Metprol. Accordingly,
Old Mutual and its associates will not be taken into account in determining a
quorum at the Metprol general meeting and their votes will not be taken into
account in determining the results of the voting at such general meeting.
4. OPINIONS AND RECOMMENDATIONS
The directors of Metprol have considered the terms and conditions of the
acquisition and are of the opinion that they are fair and reasonable to Metprol
linked unitholders and unanimously recommended that Metprol linked unitholders
vote in favour of the resolution to implement the acquisition, which is to be
considered at the Metprol general meeting.
The directors of Metprol intend to vote in favour of the resolution necessary
to implement the acquisition in respect of the Metprol linked units
beneficially owned by them or under their control.
5. DOCUMENTATION
A circular, which is subject to the approval of the JSE, containing full
details of the acquisition and incorporating a notice of general meeting and
the revised Listing Particulars of Metprol subsequent to the acquisition, is in
the course of preparation and will be posted to Metprol linked unitholders in
due course.
For and on behalf of the board
Metboard Properties Limited
Johannesburg
22 March 2001
Merchant bank
Investec Corporate Finance
Investec Bank Limited
(Registration number 1969/004763/06)
Legal adviser
Fluxman Rabinowitz - RAPHAELY WEINER
ATTORNEYS
Sponsor
Investec Securities
Investec Securities Limited
Member of the JSE Securities Exchange South Africa
(Registration number 1972/008905/06)
