| Thu 31 Mar 2005, 15:25 | | OFFER TO UNITHOLDERS OF SA RETAIL PROPERTIES |
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Hyprop - Offer To Unitholders Of SA Retail Properties Limited And Cautionary
Announcement
Hyprop Investments Limited
(Registration No. 1987/005284/06)
Share code: HYP ISIN code: ZAE000003430
(`Hyprop`)
OFFER TO UNITHOLDERS OF SA RETAIL PROPERTIES LIMITED (`SA RETAIL`) AND
CAUTIONARY ANNOUNCEMENT
INTRODUCTION
Hyprop and SA Retail linked unitholders are advised that on 31 March 2005, a
letter has been addressed to the board of directors of SA Retail providing the
board with notice of Hyprop`s firm intention to make an offer to the linked
unitholders of SA Retail (`SA Retail unitholders`) to acquire all of the linked
units in SA Retail (`SA Retail units`) not already owned by Hyprop (`the
offer`).
Hyprop currently owns 11 398 573 SA Retail units, comprising approximately 5% of
the total number of SA Retail units in issue.
RATIONALE FOR THE OFFER
SA Retail units are trading at a discount to Hyprop combined units and present
Hyprop with an opportunity to grow its assets and earnings.
The offer is to the benefit of SA Retail unitholders as the offer consideration
is higher than the current SA Retail trading price. In addition SA Retail
unitholders who accept the offer will be invested in Hyprop, a retail property
fund which has a significantly higher rating than SA Retail, and will remain
invested in the SA Retail portfolio through their investment in Hyprop.
CONDITIONS PRECEDENT TO THE OFFER
The offer will be conditional on:
- the securing by Hyprop of the approval of Hyprop combined unitholders
(other than Redefine which, as the holder of approximately 25% of SA Retail
units and 10% of Hyprop combined units, has been ruled by the JSE to be a
related party) to the acquisition of SA Retail units pursuant to the
implementation of the offer; and
- the attainment of all the necessary approvals for the implementation of the
offer from the Competition authorities.
THE OFFER CONSIDERATION
Each SA Retail unitholder which accepts the offer will receive, as consideration
for the offer, one Hyprop consideration unit (as defined below) for every 2.70
SA Retail units in respect of which the offer is accepted.
Each Hyprop consideration unit will be in the form of a renounceable letter of
allotment entitling the holder thereof to the allotment and issue on 4 July 2005
of one combined unit in Hyprop. On allotment and issue of the Hyprop combined
units to holders of the letters of allocation, such Hyprop combined units will
rank pari passu with existing Hyprop combined units in all respects.
The JSE Securities Exchange South Africa (`the JSE`) has approved, in principle,
the listing of the Hyprop renounceable letters of allocation on the JSE on the
basis that the renounceable letters of allocation will automatically convert to
Hyprop combined units after the record date for the Hyprop distribution referred
to below. Accordingly, SA Retail unitholders will be able to freely trade the
renounceable letters of allotment received in terms of the offer. Formal
application for the listing of the letters of allocation will be made at the
appropriate time.
THE SA RETAIL/MARTPROP ACQUISITION
Hyprop is of the view that the transaction between SA Retail and Martprop
Property Fund (`Martprop`) announced on 30 March 2005 (`the Martprop
transaction`) is not in the interests of SA Retail unitholders and constitutes
frustrating action as envisaged in terms of the Securities Regulation Panel Code
on Takeovers and Mergers (`the Code`) as the board of SA Retail had reason to
believe that an offer might be imminent. Hyprop will be making representations
to the SRP in this regard.
In addition, Hyprop is of the view that the Martprop transaction constitutes a
Category 1 transaction for SA Retail and, accordingly, must be approved by SA
Retail linked unitholders. Representations to the JSE will be made in this
regard.
UNDERTAKINGS
Redefine Income Fund Limited (`Redefine`) which owns 55 904 550 SA Retail units
(comprising approximately 25% of the total number of SA Retail units in issue)
has undertaken to accept the offer.
ACQUISITION OF SA RETAIL UNITS EX DISTRIBUTION
The SA Retail units acquired by Hyprop pursuant to the offer will be acquired ex
the distribution to be declared by SA Retail in respect of the income
distribution period commencing on 1 October 2004 and ending on 31 March 2005
(the `SA Retail distribution`).
If and to the extent that any SA Retail units sold to Hyprop pursuant to the
offer are transferred into Hyprop`s name on or before the record date for the SA
Retail distribution, Hyprop will cede the right to receive the SA Retail
distribution in respect of the SA Retail units in question to the SA Retail
unitholders from whom such units were acquired (`the offeree`)and shall pay such
ceded amount over to the offeree forthwith after receipt by Hyprop of the SA
Retail distribution.
HYPROP INCOME DISTRIBUTION
The Record Date for Hyprop`s distribution to its combined unitholders in respect
of the six month period ending 30 June 2005 will be 1 July 2005. Accordingly,
the Hyprop consideration units issued pursuant to the offer shall not
participate in the Hyprop distribution in respect of the six months ending 30
June 2005.
Based on the combined unit price of Hyprop of R21,80 at the date of this letter,
the implied value of the offer consideration is R8,07 per SA Retail unit.
INTENTION TO INVOKE S440K OF THE COMPANIES ACT
Should the offer be accepted by offerees in respect of 9/10 or more or the SA
Retail units, Hyprop will invoke the provisions of section 440K of the Companies
Act to compulsorily acquire all of the SA Retail units in respect of which
offers were not accepted and apply for the termination of the listing of SA
Retail.
ALTERNATIVE STRUCTURE
Hyprop reserves the right to amend or modify the structure of its offer on a
basis which does not result in a reduction of the consideration being offered to
holders of SA Retail units. Such alternative structure may include the
implementation of the transaction by way of a scheme of arrangement in terms of
section 311 of the Companies Act or by an acquisition pursuant to section 228 of
the Companies Act.
FURTHER DOCUMENTATION
As required in terms of the Code, Hyprop will, within 30 days of the date of
this announcement, post a circular to SA Retail unitholders containing the terms
of the offer (`the offer document`).
In terms of the Code the board of SA Retail must, within 14 days of publication
of the offer document, send a document to SA Retail unitholders advising them of
its views on the offer.
In addition a circular will be sent to Hyprop combined unitholders providing
details of the offer and including notices of Hyprop shareholder and debenture
holder meetings at which the Hyprop shareholders and debenture holders will be
asked to approve the resolution necessary to give effect to the offer.
FINANCIAL EFFECTS AND CAUTIONARY ANNOUNCEMENT
A further announcement containing the financial effects of the offer on Hyprop
unitholders and a detailed timetable will be published in due course. Hyprop
unitholders are advised to exercise caution in their dealings in Hyprop linked
units until such announcement is made.
Rosebank
31 March 2005
Corporate advisor
Legal advisor
Sponsor
Java Capital (Proprietary) Limited
Date: 31/03/2005 03:10:51 PM
Produced by the JSE SENS Department
