| Thu 31 Jul 2003, 14:55 | | Disposal by Pangbourne of a Portfolio of Propertie |
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Disposal by Pangbourne of a Portfolio of Properties to IFour Properties Limited
("IFour") and Cautionary Announcement
PANGBOURNE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP ISIN: ZAE000005252
("Pangbourne" or "the company")
DISPOSAL BY PANGBOURNE OF A PORTFOLIO OF PROPERTIES TO iFOUR PROPERTIES LIMITED
("iFOUR") AND CAUTIONARY ANNOUNCEMENT
1. Introduction
Standard Corporate and Merchant Bank is authorised to announce that, subject
to the fulfilment of certain conditions precedent as set out in paragraph 5
below, Pangbourne has entered into an agreement ("the sale agreement") to
dispose of certain office, commercial and retail properties ("the properties")
to iFour for a consideration of 49 911 200 new iFour linked units at an issue
price of R5,00 per iFour linked unit ("the consideration units") equating to an
approximate aggregate consideration of R249,6 million ("the proposed
transaction"). The attention of Pangbourne combined unitholders is drawn to the
iFour announcement published today in which details of the proposed transaction
and the proposed acquisition by iFour of other properties from vendors unrelated
to Pangbourne ("the other iFour property acquisitions") have been disclosed.
2. Rationale for the proposed transaction
The proposed transaction offers Pangbourne the opportunity to diversify its
risk profile by increasing its interest in iFour rather than through direct
investment in properties. The consideration units will be retained by Pangbourne
for the foreseeable future as part of its long-term investment strategy.
Pangbourne has also entered into various agreements, which, on
implementation, will result in Pangbourne managing substantially all of iFour"s
properties. This will allow Pangbourne to enjoy benefits of scale in utilising
its existing property management expertise.
3. Pangbourne"s interest in iFour
It was announced on 10 March 2003 that Pangbourne had acquired, in aggregate,
19 711 600 iFour linked units in addition to the 118 000 iFour linked units
already held. It is expected that 7 456 871 of the consideration units will be
placed with institutional investors in terms of a vendor placing ("the vendor
placing"). On implementation of the proposed transaction, the vendor placing and
the other iFour property acquisitions, Pangbourne will own 62 283 929 iFour
linked units, representing 49,99% of the iFour linked units in issue.
4. Securities Regulation Panel ruling
As set out in paragraph 3 above, on implementation of the proposed
transaction, the vendor placing and the other iFour property acquisitions,
Pangbourne will hold in excess of 35% of the issued linked units in iFour and
would ordinarily be obliged to make an offer to iFour linked unitholders in
terms of Rule 8.1 of the Securities Regulation Code on Takeovers and Mergers
("the Code").
The Securities Regulation Panel ("the SRP") has, however, utilised its
discretion in terms of Rule 34 of the Code and has granted Pangbourne
dispensation from the provisions of Rule 8.1 in that Pangbourne"s interest in
iFour will be permitted to fluctuate between 35% and 50% without a mandatory
offer being made by Pangbourne to all iFour linked unitholders, on condition
that:
- Pangbourne"s interest in iFour is reduced to below 35% within twelve months of
the date on which an obligation in terms of Rule 8.1 of the Code to make an
offer to the linked unitholders of iFour would normally have been triggered
("the twelve-month period"); and
- during the twelve-month period, Pangbourne makes no acquisitions of iFour
linked units on the open market.
The linked unitholding of Pangbourne in iFour above the 34,9% limit will be
sterilised and Pangbourne will not be allowed to vote or act on these sterilised
iFour linked units.
In the event that Pangbourne"s interest in iFour is not reduced below 35%
within the twelve-month period, Pangbourne will be required to make an offer to
iFour linked unitholders at the price at which it acquired the iFour linked
units in respect of the proposed transaction, together with interest, at the
Government-specified rate, i.e. the official prescribed rate, based on the
highest price at which any such securities were issued, for the period that
Pangbourne"s interest in iFour linked units has exceeded 35% (such rate to be
adjusted for any distributions made to iFour linked unitholders in the twelve-
month period).
If, during the twelve-month period, iFour linked unitholders pass a
resolution to waive the requirement for a mandatory offer, as contemplated in
Rule 8.7 of the Code, then the requirement to make an offer will fall away.
5. Suspensive conditions
The proposed transaction is subject to the fulfilment of, inter alia, the
following suspensive conditions:
5.1 the procurement by iFour of written undertakings from institutional
investors to ensure the placement of sufficient consideration units that
will result in Pangbourne"s interest in iFour, after the implementation of
the proposed transaction and the other iFour property acquisitions,
remaining below 50%;
5.2 the approval of a simple majority of Pangbourne shareholders in general
meeting;
5.3 the approval of a simple majority of Pangbourne debenture holders in
general meeting;
5.4 the approval of a simple majority of iFour shareholders in general
meeting;
5.5 the approval of a simple majority of iFour debenture holders in general
meeting;
5.6 the approval of the JSE Securities Exchange South Africa of the listing
of the consideration units;
5.7 the approval of the necessary regulatory authorities;
5.8 agreements entered into by iFour in respect of the proposed transaction
and the other iFour property acquisitions becoming unconditional in respect
of a minimum aggregate consideration of R500 million ("the minimum
portfolio value"); and
5.9 the procurement by iFour of written commitments from investors in terms
of which such investors undertake to subscribe for iFour linked units for
an aggregate amount of at least 45% of the minimum portfolio value or such
other greater or lesser amount as iFour may deem necessary in its
discretion.
6. Cautionary announcement
Pangbourne combined unitholders are advised to exercise caution when dealing
in their combined units until such time as a further announcement containing the
financial effects and salient dates and times of the proposed transaction is
published.
Johannesburg
31 July 2003
Merchant bank and sponsor to Pangbourne
SCMB
Standard Corporate and Merchant Bank
(A division of The Standard Bank of South Africa Limited)
(Registration number 1962/000738/06)
Corporate law advisers and consultants to the proposed transaction
Edward Nathan & Friedland (Pty) Ltd
Corporate Law advisers & Consultants
(Registration number 1999/026464/07)
Legal advisers to Pangbourne
Bieldermans Inc.
Attorneys , Notaries and Conveyancers
Date: 31/07/2003 01:31:06 PM Supplied by www.sharenet.co.za
Produced by the JSE SENS Department
