| Mon 12 May 2003, 17:13 | | Limited Acquisition & Disposal Of Properties |
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Spearhead Property Holdings
SPEARHEAD PROPERTY HOLDINGS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1996/005827/06)
("Spearhead" or "the company")
Share code: SPE
ISIN: ZAE000019162
Acquisition and disposal of properties
1. Introduction
Further to the cautionary announcement dated 12 March 2003, unitholders are
notified that Spearhead has entered into agreements for:
- the purchase of the Ottery Hypermarket ("the acquisition") from Quantum Leap
Investments 230 (Pty) Limited ("Quantum");
- the disposal of Sammy Marks Square (Portion 3) ("the disposal") to Shops for
Africa Limited ("Shops for Africa"); and
- the purchase of a 45% interest in The 129 Beach Road Trust, which entity has
as its sole asset 129 Beach Road, Green Point, Cape Town, from iFour Properties
S.A. (Pty) Limited ("iFour");
collectively, "the transactions".
2. The acquisition
Spearhead will acquire the Ottery Hypermarket from Quantum for an amount of
R55.5 million ("the acquisition consideration"), payable on the date of
registration of transfer of the property into the name of Spearhead. The
acquisition consideration will be satisfied in cash, as to R12 million, with the
balance being met by the issue of 4 724 711 Spearhead linked units. The linked
units to be issued to Quantum have been placed by Spearhead, on behalf of
Quantum, with specifically identified institutions and individuals ("the vendor
placing").
The acquisition and the vendor placing are subject to the fulfilment of the
following conditions precedent:
- securing of finance in respect of the cash portion of the acquisition
consideration;
- JSE Securities Exchange South Africa ("JSE") and any other regulatory
approvals; and
- approval by the Spearhead unitholders in general meeting.
3. The disposal
Spearhead has entered into an agreement for the disposal of Sammy Marks Square
(Portion 3) to Shops for Africa for R37 million ("the disposal consideration"),
payable on the date of registration of transfer of the property. The disposal
consideration will be satisfied by the issue of
6 046 512 Shops for Africa linked units and R24 million cash. The cash portion
of the disposal consideration will be utilised to reduce Spearhead"s borrowings.
The disposal is subject to the fulfilment of the following conditions precedent:
- Shops for Africa securing the necessary finance to acquire Sammy Marks Square
(Portion 3);
- approval by Shops for Africa unitholders in general meeting; and
any other regulatory approvals, as may be required.
4. The acquisition of 129 Beach Road
On 19 February 2003, Spearhead entered into an agreement with iFour, for the
purchase of a 45% interest in The 129 Beach Road Trust, which entity has as its
sole asset 129 Beach Road, Green Point, Cape Town ("the Beach Road
acquisition"). The purchase consideration of R20.7 million is payable in cash.
The Beach Road acquisition is not expected to have a material effect on the
earnings and net asset value of Spearhead in the current year but is expected to
positively contribute to earnings in the future.
5. Financial effects of the acquisition and the disposal
Set out in the table below are the pro forma financial effects of the
acquisition and the disposal based on Spearhead"s interim results for the six
months ended 31 December 2002. The pro forma financial effects have been
prepared for illustrative purposes only to provide information of how the
acquisition and the disposal may have impacted on the results and financial
position of Spearhead. Because of their nature, the pro forma financial effects
may not give a fair reflection of Spearhead"s financial position after the
acquisition and the disposal or the effect on future earnings.
Note Before After Per-
the the centage
acquisition acquisition cange
(cents)1 (cents) (%)
Earnings per linked
unit (cents) 2 68.08 68.85 1.13
Headline earnings per
linked unit (cents) 2 71.54 71.02 (0.73)
Net asset value per
linked unit (cents) 3 1 243 1 155 (7.08)
Net tangible asset
value per linked unit
(cents) 3 1 128 1 070 (5.14)
After the
After Per- acquisition Per-
the centage and the centage
disposal change disposal change
(cents) (%) (cents) (%)
Earnings per linked
unit (cents) 70.69 3.83 70.81 4.01
Headline earnings per
linked unit (cents) 73.61 2.89 72.98 2.01
Net asset value per
linked unit (cents) 1 268 2.01 1 175 (5.47)
Net tangible asset
value per linked unit
(cents) 1 153 2.22 1 089 (3.46)
Note:
1. Extracted from the unaudited interim results of Spearhead for the 6 months
ended 31 December 2002.
2. Earnings and headline earnings per linked unit are based on the following
assumptions:
- the acquisition and the disposal were effective 1 July 2002;
- a tax rate of 30%;
- 18 701 969 linked units in issue during the period.
3. Net asset and tangible asset value per linked unit are based on the following
assumptions:
- the acquisition and the disposal were effective 31 December 2002; and
- 18 701 969 linked units in issue at 31 December 2002.
6. Rationale for the transactions
In line with Spearhead"s long-term objective to grow the quality of its property
portfolio and further enhance its tenant mix and diversity, the company has
embarked on a policy of acquiring medium to high-yielding properties and
disposing of properties which do not meet its investment criteria. Spearhead is
also disposing of its Gauteng properties in order to concentrate solely on the
Western Cape.
7. Vendor placing
As mentioned in paragraph 2 above, the linked units to be issued as part
consideration for the acquisition of the Ottery Hypermarket, have been placed by
Spearhead on behalf of Quantum.
Certain of the linked units have been placed with Spearhead directors. In terms
of the Listings Requirements of the JSE this is regarded as a related party
transaction, which requires, inter alia, the preparation of a circular, which
must include an opinion from an independent advisor as to the fairness and
reasonableness of the transaction, and unitholder approval. Moores Rowland,
Chartered Accountants (SA), have been appointed as the independent advisor and
their opinion will be included in the circular to Spearhead unitholders.
8. Documentation
A circular, which is subject to the approval of the JSE, will be sent to
unitholders in due course. The circular will contain details of the acquisition,
the disposal and the vendor placing, and will incorporate a notice of general
meeting to Spearhead unitholders.
Cape Town
12 May 2003
Corporate advisor and sponsor
Bridge Capital
Reporting accountants and auditors
Fisher Hoffman PKF
Attorney
Hofmeyr
www.spearheadprop.com
Date: 12/05/2003 05:05:39 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
