| Mon 4 Apr 2005, 14:50 | | Notice of firm intention to make an offer |
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S A Retail Properties Limited - Notice of firm intention to make an offer
received from Hyprop Investments Limited
S A RETAIL PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/025764/06)
(JSE Code: SRL & ISIN Code: ZAE000034328)
(`S A Retail`)
RECEIPT OF A NOTICE OF A FIRM INTENTION TO MAKE AN OFFER TO S A RETAIL
UNITHOLDERS FROM HYPROP INVESTMENTS LIMITED AND CAUTIONARY ANNOUNCEMENT
Unitholders are referred to the announcement by Hyprop Investments Limited
(`Hyprop`) published on Sens on Thursday, 31 March 2005 and in the press on
Friday, 1 April 2005, in terms of which Hyprop announced a firm intention to
make an offer to acquire all the linked units in S A Retail from unitholders,
not already owned by Hyprop.
1. TERMS OF THE OFFER
1.1 The offer
The following is extracted (in summary form) from the Hyprop announcement:
In terms of the offer, each S A Retail unitholder, which accepts the offer, will
receive one Hyprop consideration unit (as defined below) for every 2.70 S A
Retail linked units in respect of which the offer is accepted.
Based on the combined unit price of Hyprop of R21,80 at the date of the
announcement, the implied value of the offer consideration is R8,07 per S A
Retail unit.
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, S A 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.
1.2 Acquisition of S A Retail linked units ex distribution
The S A Retail linked units acquired by Hyprop pursuant to the offer will be
acquired ex the distribution to be declared by S A Retail for the income
distribution period commencing on 1 October 2004 and ending on 31 March 2005
(the `S A Retail distribution`). If and to the extent that any S A Retail
linked units sold to Hyprop pursuant to the offer are transferred into Hyprop`s
name on or before the record date for the S A Retail distribution, Hyprop will
cede the right to receive the S A Retail distribution in respect of the S A
Retail linked units in question for the period to 31 March 2005 to the S A
Retail unitholders from whom such linked units were acquired (`the offeree`) and
shall pay such ceded amount over to the offeree forthwith after receipt by
Hyprop of the S A Retail distribution.
1.3 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.
1.4 Intention to invoke s440k of the Companies Act
Should the offer be accepted by offerees in respect of 9/10 or more or the S A
Retail linked units, Hyprop has indicated that it will invoke the provisions of
section 440K of the Companies Act to compulsorily acquire all of the S A Retail
linked units in respect of which offers were not accepted and apply for the
termination of the listing of S A Retail.
1.5 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
toholders of S A Retail linked 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.
2. EXISTING HOLDING OF SECURITIES IN S A RETAIL
Hyprop has indicated that it currently owns 11 398 573 S A Retail linked units,
comprising approximately 5% of the total number of S A Retail linked units in
issue.
3. UNDERTAKINGS
Hyprop has indicated that Redefine Income Fund Limited (`Redefine`) which owns
55 904 550 S A Retail linked units (comprising approximately 25% of the total
number of S A Retail linked units in issue) has undertaken to accept the offer.
4. CONDITIONS PRECEDENT TO THE OFFER
Hyprop has indicated that the offer is conditional on:
- the securing by Hyprop of the approval of Hyprop combined unitholders
(other than Redefine which, as the holder of approximately 25% of S A Retail
linked units and 10% of Hyprop combined units, has been ruled by the JSE to be a
related party) to the acquisition of S A Retail linked 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.
5. HYPROP`S RATIONALE FOR THE OFFER
The board of S A Retail notes that Hyprop`s rationale for the offer is that S A
Retail linked units are trading at a discount to Hyprop combined units and
present Hyprop with an opportunity to grow its assets and earnings. Hyprop is
of the view that the offer is to the benefit of S A Retail unitholders as the
offer consideration is higher than the current S A Retail trading price. In
addition Hyprop states that S A Retail unitholders who accept the offer will be
invested in Hyprop, a retail property fund which has a significantly higher
rating than S A Retail, and will remain invested in the S A Retail portfolio
through their investment in Hyprop.
6. COMMENT FROM S A RETAIL BOARD
6.1 The board of S A Retail has received the notification of Hyprop`s firm
intent to make an offer on the terms set out in this announcement, and is
considering the offer. In considering the offer, it will appoint an independent
financial adviser to advise it on the offer and how the offer affects all
holders of S A Retail linked units.
6.2 In terms of the Securities Regulation Code and Rules of the SRP (`the
Code`), Hyprop is obliged to post its offer document within 30 days of the date
of its firm intent announcement, and the board of S A Retail is obliged to
advise S A Retail unitholders of its views on the offer (as well as the views of
its independent financial advisers) within 14 days of that date.
6.3 The board of S A Retail will comply with its obligations under the Code in
this regard.
7. THE S A RETAIL / MARTPROP ACQUISITION
7.1 The board of S A Retail notes that Hyprop is of the view that the
transaction between S A Retail and Martprop Property Fund (`Martprop`) announced
on 30 March 2005 (`the S A Retail / Martprop acquisition`) is `not in the
interests of S A Retail unitholders` and `constitutes frustrating action`
envisaged in terms of the Code., as the board of S A Retail had reason to
believe that an offer might be imminent. The board of S A Retail assures its
unitholders that the board considered the terms of the S A Retail / Martprop
transaction fully, and believes it to be in the best interests of S A Retail
unitholders. In addition, the board of S A Retail confirms that at the time of
the announcement of the S A Retail / Martprop transaction it had no reason to
believe that a bona fide offer was imminent and in its view the S A Retail /
Martprop transaction does not constitute `frustrating action` in terms of the
Code, and it will be taking this up with the Securities Regulation Panel.
7.2 The board of S A Retail also notes that Hyprop is of the view that the S A
Retail / Martprop transaction constitutes a category 1 transaction under the
Listings Requirements of the JSE Securities Exchange for S A Retail requiring S
A Retail unitholders` approval. The board of S A Retail believes that the
transaction does not constitute a category 1 transaction and will take this
matter up with the JSE.
8. CAUTIONARY ANNOUNCEMENT
S A Retail will publish a further announcement in due course. Until such time
unitholders are advised to exercise caution when dealing in their linked units.
Durban
4 April 2005
CORPORATE ADVISER ATTORNEYS SPONSOR
MARRIOTT CORPORATE PROPERTY BANK WWBCox Yeats EXCHANGE SPONSORS
Date: 04/04/2005 02:15:42 PM
Produced by the JSE SENS Department
