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Prima Property Trust - Acquisition Of Properties From The Standard Bank Of South
Africa Limited (`SBSA`)
Prima Property Trust
Share code: PRM ISIN code: ZAE000005641
(`Prima`)
(A collective investment scheme in property managed by Prima Property Trust
Managers Limited (`PPTM`), in terms of the Collective Investment Schemes Control
Act, 45 of 2002)
ACQUISITION OF PROPERTIES FROM THE STANDARD BANK OF SOUTH AFRICA LIMITED
(`SBSA`)
INTRODUCTION
Java Capital is authorised to announce that an agreement has been concluded for
the acquisition by Prima of a portfolio of property letting businesses (`the
SBSA portfolio`) conducted in respect of 20 buildings (`the properties`) from
SBSA (the `acquisition`). The terms of the acquisition are set out below.
RATIONALE FOR THE ACQUISITION
Prima continues to acquire quality properties with capital values of under R15
million, thereby diversifying its property portfolio and income stream and
reducing its risk profile.
Given that the properties are located throughout South Africa, the acquisition
will result in the further diversification of the geographic spread of Prima`s
property portfolio.
The SBSA portfolio comprises quality retail properties located in major
metropolitan areas tenanted predominantly by SBSA.
The acquisition will accordingly enhance the tenant profile of Prima`s property
portfolio.
TERMS OF THE ACQUISITION
The effective date of the acquisition will be 1 January 2005.
The aggregate purchase price payable in respect of the acquisition is an amount
of R80 million to be settled by the payment of R24 000 000 in cash and the
balance, being R56 000 000, by the issue of 60 215 054 units in Prima at 93
cents each (the `consideration units`). Interest will be payable on the full
purchase price at the rate of 10.5% per annum for the period between the
effective date and the transfer date. The consideration units will rank for
income distributions with effect from the transfer date, which is anticipated to
be on or about 3 May 2005.
RELATED PARTY TRANSACTION
The JSE Securities Exchange South Africa (`JSE`) has ruled that because SBSA
owns 50% of the shares in Madison Property Fund Managers (Proprietary) Limited,
which indirectly owns the entire issued share capital of PPTM, the manager of
Prima, the acquisition is a related party transaction in terms of the JSE
Listings Requirements. Accordingly, Fisher Hoffman PKF (Jhb) Inc. has been
appointed to assess the fairness and reasonableness of the acquisition. The
acquisition is, in addition, conditional upon the approval of Prima unitholders
in general meeting being obtained.
CONDITIONS PRECEDENT
The acquisition is subject to:
1. the conditional written approval of the JSE for the listing of the
consideration units being obtained;
2. the unconditional approval of the competition authorities being obtained;
3. lease agreements being concluded by and between PPTM and SBSA in respect of
each of the properties occupied by SBSA on terms set out in the acquisition
agreement;
4. the approval of the board of directors of SBSA being obtained; and
5. the approval of Prima unitholders at a general meeting. While the Prima
units held or controlled by SBSA or its associates (if any) shall be taken
into account for the purposes of determining a quorum at such general
meeting, the votes in respect of such units will not be taken into account
for the purposes of determining the results of the resolution for the
ratification and implementation of the acquisition.
FINANCIAL EFFECTS
The pro forma financial effects of the acquisition set out in the table below
have been prepared for illustrative purposes only to provide information on how
the acquisition may have impacted on Prima. Because of their nature, the pro
forma financial effects may not give a fair reflection of Prima`s financial
position after the acquisition or the effect of the acquisition on future
earnings.
Before the After the Change
acquisition acquisition %
Historical earnings per
unit (cents) 20.15 18.75 (6.95)
Historical headline earnings
per unit (cents) 10.24 10.45 2.05
Historical net asset value
per unit (cents) 90.72 90.66 (0.07)
Historical tangible net asset
value per unit (cents) 90.72 90.66 (0.07)
Notes:
1 The historical earnings, headline earnings, net asset value and net
tangible asset value per Prima unit as set out in the `Before the
acquisition` column of the table are based on Prima`s audited results for
the 10 months ended 30 April 2004.
2. The historical earnings per Prima unit as set out in each of the columns of
the table are based on the following assumptions:
- the acquisition took effect on 1 July 2003;
- the acquisition and the costs thereof were funded by borrowings
(raised in respect of the acquisition and the costs);
- the Prima units to be issued in partial consideration for the
acquisition were issued on 1 July 2003;
- interest on the borrowings was raised at an effective rate of 11.93%
per annum; and
- the historical financial numbers used in respect of the properties
relate to a twelve month period.
3. A pro rata portion of the costs attributable to each of the properties has
been capitalised to the property in question.
4. The historical headline earnings per Prima unit as set out in each of the
columns of the table have been calculated on the same basis as the historical
earnings per Prima unit, but exclude the fair value adjustments.
The historical net asset value and tangible net asset value per Prima unit as
set out in the `After the acquisition` column of the table are based on the
assumptions that:
- the acquisition took effect on 30 April 2004;
- the acquisition was funded by the requisite borrowings. Costs of the
acquisition were financed through borrowings; and
- the Prima units to be issued in partial consideration for the
acquisitions were issued on 30 April 2004.
CIRCULAR TO PRIMA UNITHOLDERS
A circular to Prima unitholders will be issued in due course. The salient dates
of the acquisition will be announced on SENS and in the press once the circular
has been finalised.
Rosebank
6 January 2005
Corporate advisor
Legal advisor
Sponsor
Java Capital (Proprietary) Limited
Reporting accountants
KPMG
Chartered Accountants (SA)
Independent advisor
Fisher Hoffman PKF (Jhb) Inc.
Date: 06/01/2005 04:33:27 PM
Produced by the JSE SENS Department
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