| Tue 9 Nov 2004, 8:54 | | VUKILE PROPERTY FUND LIMITED - ACQUISITION |
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VUKILE PROPERTY FUND LIMITED - ACQUISITION
Vukile Property Fund Limited
(Incorporated in the Republic of South Africa)
Registration number 2002/027194/06
JSE code: VKE ISIN: ZAE000056370
(`Vukile`)
* THE OFFER BY VUKILE TO ACQUIRE THE ENTIRE ISSUED CAPITAL
OF MICC PROPERTY INCOME FUND LIMITED
* REVISED OFFER CONSIDERATION
* FURTHER CAUTIONARY ANNOUNCEMENT
1. Introduction
Vukile unitholders are referred to the announcements that have recently been
published by Vukile and MICC Property Income Fund Limited (`MICC`) relating to
Vukile`s intention to acquire the entire issued capital of MICC:
* in an announcement dated 7 September 2004, Vukile unitholders were informed
of Vukile`s intention to make an offer to the MICC unitholders to acquire all
their MICC linked units (`the offer`) for a consideration of 12 Vukile linked
units for every 10 MICC linked units held (`the offer consideration`);
* simultaneously with the abovementioned announcement, MICC published an
announcement acknowledging the receipt by the MICC board of Vukile`s notice of
its firm intention to make the offer; and
* following these announcements, and in pursuit of its intention to acquire the
entire issued capital of MICC, Vukile announced on 22 October 2004 that it had
acquired, subject to the fulfilment of certain conditions precedent, a 17,6%
interest in MICC from Santam Limited, Sanlam Life Insurance Limited and Sanlam
Limited (collectively `Sanlam`), for the offer consideration (`the Sanlam
acquisition`).
Unitholders are hereby notified of the following:
* Vukile has increased the offer consideration to 126 Vukile linked units for
every 100 MICC linked units held (`the revised offer consideration`); and
* Vukile will make an offer to all MICC unitholders to acquire all their MICC
linked units, other than the MICC linked units acquired by Vukile in terms of
the Sanlam acquisition, for the revised offer consideration (`the revised
offer`). Should the revised offer be accepted by MICC unitholders holding not
less than 90% of MICC`s issued capital, excluding the MICC linked units acquired
by Vukile in terms of the Sanlam acquisition, Vukile intends invoking the
provisions of section 440K of the Companies Act (Act 61 of 1973), as amended, to
compulsorily acquire all the MICC linked units from the MICC unitholders who did
not accept the revised offer.
2. The Sanlam acquisition
The revised offer consideration will also apply to the Sanlam acquisition. The
Sanlam acquisition is conditional on, inter alia, approval by the Vukile
unitholders in general meeting and in this regard a circular to Vukile
unitholders will be posted in due course.
3. The revised offer
The revised offer is conditional on the fulfilment of the following conditions
precedent:
* regulatory approvals including, but not limited, to the Competition
authorities, the Securities Regulation Panel (`the SRP`) and the JSE Securities
Exchange South Africa (`the JSE`); and
* approval by the Vukile unitholders in general meeting.
The revised offer, and similarly, the Sanlam acquisition, will only be
implemented after the last day to register for the MICC distribution for the
year ended 30 September 2004, and after the last day to register for the Vukile
distribution for the six months ended 30 September 2004. Therefore, MICC
unitholders, including Sanlam, will participate in the MICC distribution and not
the Vukile distribution.
4. Undertakings
4.1 The Sanlam acquisition
Vukile has received irrevocable undertakings from Vukile unitholders holding
38 560 000 Vukile linked units, representing 58% of Vukile`s issued capital,
excluding the Vukile linked units held by Sanlam, to vote in favour of the
resolutions to approve the Sanlam acquisition.
4.2 The revised offer
Vukile has received irrevocable undertakings from Vukile unitholders holding
38 560 000 Vukile linked units, representing 58% of Vukile`s issued capital,
excluding the Vukile linked units held by Sanlam, to vote in favour of the
resolutions to approve the revised offer.
In addition to the 17,6% interest in MICC acquired by Vukile in terms of the
Sanlam acquisition, Vukile has received acceptances of the offer from MICC
unitholders holding 22 183 700 MICC linked units, representing 33,1% of MICC`s
issued capital. In addition, Vukile has received acceptances of the revised
offer from MICC unitholders currently holding in excess of 11% of MICC`s issued
capital. These acceptances are in respect of all the MICC linked units that they
hold at the time when the revised offer becomes unconditional. Collectively, all
the MICC unitholders who have undertaken to accept the offers are referred to as
`the committed MICC unitholders`.
The revised offer will not in any way cancel, amend, revoke, novate and/or
otherwise vary the agreements entered into by the committed MICC unitholders.
Should the revised offer, for any reason, not be implemented or accepted by the
committed MICC unitholders, then the committed MICC unitholders are in any event
bound to those agreements and Vukile will likewise remain obligated to perform
in terms of those agreements.
5. Financial effects of the transaction
The table below illustrates the financial effects per Vukile linked unit of
acquiring 100% of MICC`s issued capital through the Sanlam acquisition and the
revised offer (`the transaction`), based on Vukile`s profit forecast for the
year ending 31 March 2005 and its pro forma balance sheet at 1 April 2004. The
unaudited pro forma financial effects have been prepared for illustrative
effects only to provide information on how the transaction may have impacted
Vukile`s results and financial position. Due to the nature of the unaudited pro
forma financial effects, they may not give a fair reflection of Vukile`s
financial position after the transaction nor the effect on future earnings.
Before the After the Change
transaction transaction (%)
Yield per Vukile linked unit (%) (Note 1) 12.05(2) 12.64(4) 4.91
Distribution per Vukile linked unit (cents) 60.25(2) 63.21(4) 4.91
Net asset value and tangible net asset value
per Vukile linked unit (cents) 487.57(3) 501.30(5) 2.81
Loss per share (cents) (1.25)(2) (2.09)(4) (66.60)
Headline earnings per share (cents) 0.12(2) 0.06(4) (49.42)
Number of Vukile linked units in issue 205 129 430 289 540 229
Notes:
1. The yields per Vukile linked unit are based on the distributions per Vukile
linked unit and a price of 500 cents per Vukile linked unit.
2. The loss and headline earnings per share, and yield and distribution per
Vukile linked unit in the `Before the transaction` column are based on Vukile`s
profit forecast for the year ending 31 March 2005, published in Vukile`s
prospectus dated 14 June 2004.
3. The net asset value and tangible net asset value per Vukile linked unit in
the `Before the transaction` column are based on Vukile`s pro forma balance
sheet at 1 April 2004, published in Vukile`s prospectus dated 14 June 2004.
4. The loss and headline earnings per share, and yield and distribution per
Vukile linked unit in the `After the transaction` column are based on the
following assumptions:
* the transaction took place with effect from 1 April 2004;
* the incorporation of MICC`s profit estimate for the year ended 30 September
2004; and
* the transaction will result in certain synergies and cost savings, thereby
reducing the operating expenditure of the combined entity.
5. The net asset value and tangible net asset value per Vukile linked unit in
the `After the transaction` column are based on the following assumptions:
* the transaction took effect on 1 April 2004 and the new Vukile linked units
to be issued in terms of the transaction were issued on that date; and
* the transaction costs have been capitalised to the cost of the properties.
6. Opinion and recommendations
As Sanlam is a related party, the Sanlam acquisition is classified as a related
party transaction in terms of the JSE Listings Requirements. Accordingly, the
directors appointed Bridge Capital Services (Pty) Limited (`Bridge Capital` or
`the independent advisor`) to provide an opinion on the fairness and
reasonableness of the terms and conditions of the Sanlam acquisition. Bridge
Capital is of the opinion that the terms and conditions of the Sanlam
acquisition are fair and reasonable to Vukile unitholders. The content of its
opinion will be contained in the circular to Vukile unitholders to be
distributed in due course.
The directors are of the opinion that the terms and conditions of the
transaction are fair and reasonable to Vukile unitholders and recommend that
Vukile unitholders vote in favour of the resolutions to approve the transaction.
7. Documentation and further cautionary announcement
The offer document from Vukile to MICC unitholders containing details of the
revised offer will be posted to MICC unitholders once the necessary approvals
and consents have been obtained from, inter alia, the SRP.
A circular to Vukile unitholders containing details of the transaction and
incorporating the notice of general meeting will be posted to Vukile unitholders
in due course.
As the results of the revised offer are not yet known, Vukile unitholders are
required to continue to exercise caution when dealing revised in their Vukile
linked units.
Johannesburg
9 November 2004
Independent advisor and sponsor to Vukile
BRIDGE CAPITAL
Legal advisor to Vukile
BRINK COHEN LE ROUX
Reporting accountant and auditors
Grant Thornton
Chartered Accountants (SA)
Accountants, Auditors & Business Advisers
Date: 09/11/2004 07:52:14 AM
Produced by the JSE SENS Department
