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Hyprop - Amendment of terms of offer to unitholders of SA Retail to incorporate
a cash alternative and update on the offer
Hyprop Investments Limited
(Registration No. 1987/005284/06)
Share code: HYP ISIN code: ZAE000003430
(`Hyprop`)
AMENDMENT OF TERMS OF OFFER TO UNITHOLDERS OF SA RETAIL PROPERTIES LIMITED (`SA
RETAIL`) TO INCORPORATE A CASH ALTERNATIVE AND UPDATE ON THE OFFER
INTRODUCTION
Hyprop and SA Retail unitholders are referred to the announcements dated 31
March 2005 and 20 April 2005 which set out the terms and contain an update of
Hyprop`s firm intention to make an offer (`the 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.
Hyprop intends to revise the terms of the offer so as to afford SA Retail
unitholders an election to require that the offer consideration be discharged
either in the form of Hyprop consideration units or by way of cash consideration
(or a combination of the aforegoing) as more fully detailed below.
AMENDMENT TO THE TERMS OF THE OFFER
The offer will provide that each SA Retail unitholder which accepts the offer
may elect that the offer consideration be discharged by Hyprop either on the
basis of:
- one Hyprop consideration unit for every 2.7 SA Retail units in respect of
which the offer is accepted; or
- the payment of R8,00 in cash for every 1 SA Retail unit in respect of which
the offer is accepted.
Save as aforesaid the offer will be made subject to the same terms and
conditions as previously announced.
CASH CONFIRMATION
The Securities Regulation Panel (`SRP`) has been given appropriate confirmation
in terms of its requirements that Hyprop has sufficient resources available to
it to satisfy full acceptance of the cash consideration.
REDEFINE UNDERTAKING
Redefine Income Fund Limited (`Redefine) has undertaken to accept the Hyprop
offer on the basis that the offer consideration due to Redefine in respect of
its 55 904 550 SA Retail units will be discharged by way of Hyprop consideration
units.
FINANCIAL EFFECTS
The pro forma financial effects of the offer on the historical earnings,
headline earnings, net asset value and tangible net asset value per Hyprop
combined unit (on the assumption that the offer consideration would be
discharged in the form of Hyprop consideration units) was published over SENS on
20 April 2005 and in the press on 21 April 2005.
The pro forma financial effects of the offer on the historical earnings,
headline earnings, net asset value and tangible net asset value per Hyprop
combined unit (on the assumption that the offer will be accepted in respect of
all of the remaining SA Retail units and that the offer consideration will be
discharged to all of the remaining SA Retail unitholders exclusively by way of
cash consideration (other than Redefine Income Fund Limited which has undertaken
to elect to receive Hyprop consideration units in discharge of the offer
consideration due to it)) are set out below:
Pro forma Pro forma % change
before SA after SA
Retail Retail
offer offer
Headline earnings per combined 163.81(1) 165.81(2) 1.2
unit
Earnings per combined unit 819.10(1) 785.19(3) (4.1)
Net asset value per combined 17.91(1) 18.41(4) 2.8
unit
Net tangible asset value per 17.91(1) 18.41(4) 2.8
combined unit
(1) The historical earnings and headline earnings per Hyprop combined unit as
set out in the `before offer` column of the table, are based on Hyprop`s
published audited results for the year ended 31 December 2004 (`Hyprop`s
audited results`). The historical net asset value and tangible net asset
value per Hyprop combined unit as set out in the `before offer` column of
the table are based on Hyprop`s audited balance sheet at 31 December 2004
(`Hyprop`s audited balance sheet`), in which the property portfolio is
stated at fair value.
(2) The historical headline earnings per combined unit as set out in the `after
offer` column of the table, is based on the assumption that the remaining
SA Retail units were acquired on 1 January 2004 and the offer was settled
by the payment of R1 240 701 064 in cash and the issue of 20 705 389 Hyprop
combined units on that date. In addition, the following adjustments have
been made:
(a) the assumption that 100% of the remaining SA Retail units have been
acquired has necessitated that the SA Retail unaudited interim results
for the six months ended 30 September 2004 (`SA Retail interim
results`) be consolidated with the Hyprop audited results;
(b) in order to provide comparability between the Hyprop audited results
and the SA Retail interim results, the net operating income of SA
Retail has been doubled in order to estimate their results for the
year;
(c) the fair value adjustments relating to the investment properties and
the Whirlprops put option have remained the same as those published in
the SA Retail results; and
(d) the number of Hyprop combined units to be issued has been based on the
number of SA Retail units currently owned by Redefine based on a
conversion ratio of one Hyprop combined unit for every 2.7 SA Retail
units;
(e) interest has been raised on the cash paid at an interest rate of 9%
per annum.
(3) The historical earnings per Hyprop combined unit as set out in the `after
offer` column of the table, has been calculated in the manner described for
the historical headline earnings per Hyprop combined unit but excludes the
headline earnings adjustments indicated in the Hyprop audited results as
well as the additional fair value adjustment relating to the investment
properties in the SA Retail interim results. The decrease in historical
earnings per Hyprop combined unit is as a result of the relative difference
between the Hyprop and SA Retail fair value adjustments on investment
properties (Hyprop - R924 000 000 and SA Retail - R91 000 000).
(4) The historical net asset value and tangible net asset value per Hyprop
combined unit as set out in the `after offer` column of the table, are
based on the assumption that the remaining SA Retail units were acquired on
31 December 2004 and the offer was settled by the payment of R1 240 701 064
in cash and the issue of the 20 705 389 Hyprop combined units on that date.
In addition, the following adjustments have been made:
(a) the assumption that 100% of the SA Retail units have been acquired has
necessitated that the balance sheet of SA Retail at 30 September 2004
be consolidated with the Hyprop audited balance sheet;
(b) assumed total costs of implementing the offer of R12 130 690
(excluding cost of raising debt), all of which were written off to
debenture premium and are assumed to have been incurred on 31 December
2004;
(c) the excess of the offer consideration above the net asset value of SA
Retail at 30 September 2004 has been capitalised to investment
properties; and
(d) the Hyprop combined units to be issued to Redefine have been issued at
R21,80 implying an offer consideration of R8,07 per SA Retail unit.
JSE RULINGS ON THE MARTPROP TRANSACTION
The JSE Securities Exchange South Africa (`the JSE`) has informed Hyprop, in
response to Hyprop`s contentions, that based on the announcement on SENS by SA
Retail on 30 March 2005, the transactions between SA Retail and Martprop
Property Fund (the `Martprop transaction`) constitutes a related party and
Category 1 transaction for SA Retail. Accordingly, the Martprop transaction
requires the approval of SA Retail unitholders in general meeting (excluding the
votes exercisable by the related parties).
50.8% of the holders of all SA Retail units (and more than 85% of SA Retail
unitholders excluding those which Hyprop contends constitute related parties in
relation to the Martprop transaction) have confirmed in writing that they either
require the Martprop transaction to be cancelled or that the Martprop
transaction should not be implemented unless the requisite majority of SA Retail
unitholders ratify and approve of the Martprop transaction.
Hyprop is still awaiting a ruling from the SRP in relation to Hyprop`s
contentions that the Martprop transaction constitutes frustrating action as
envisaged in terms of the SRP Code on Takeovers and Mergers.
SALIENT DATES OF THE OFFER
The SRP has consented to the offer opening on Monday, 9 May 2005.
The date on which the offer becomes unconditional will be announced on SENS and
in the press (together with details of the last day to trade, closing date and
record date of the offer). The offer will remain open for a period of at least
10 business days after it is announced that the offer has become unconditional.
Rosebank
4 May 2005
Corporate advisor
Legal advisor
Sponsor
Java Capital (Proprietary) Limited
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