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Prima Property Trust - Disposal By Prima Of Its Entire Business, Winding Up And
Further Cautionary Announcement
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 (`CISCA`))
DISPOSAL BY PRIMA OF ITS ENTIRE BUSINESS, WINDING-UP AND FURTHER CAUTIONARY
ANNOUNCEMENT
INTRODUCTION
Java Capital is authorised to announce that Prima has agreed to sell its entire
business comprising its property portfolio (the `disposal`) to ApexHi Properties
Limited (`ApexHi`). Following the disposal, Prima will be wound-up and the
listing of its units on the JSE Limited (`JSE`) will terminate. The disposal
and winding up are subject to conditions referred to below.
RATIONALE
Prima`s strategy has been to acquire shopping centres, offices and industrial
properties for capital values of less than R15 million. As a result of the
decline in interest rates and property yields, Prima has found it increasingly
difficult to continue to implement this strategy and the growth prospects of
Prima have become constrained.
The disposal provides an opportunity for Prima unitholders to exchange their
Prima units for units in ApexHi, which are highly liquid. The exchange will
expose Prima unitholders, through ApexHi units, to a diverse property portfolio
valued at approximately R5 billion and the benefits of economies of scale and
cost savings due to synergies between the Prima and ApexHi property portfolios.
TERMS OF THE DISPOSAL
The effective date of the disposal will be either 1 October 2005 or 1 January
2006, depending on how long it takes to fulfil the conditions referred to below.
ApexHi will pay the purchase price partially in cash, which will be used to
settle all mortgage bond liabilities in Prima, and partially by the issue of
ApexHi `A` units and ApexHi `B` units (collectively, the `consideration units`).
The consideration units, net of all liabilities and any outstanding expenses,
will equate to 5.9 `A` units and 5.9 `B` units for every 100 Prima units in
issue. In aggregate, the price will amount to R996,2 million in cash and
consideration units.
ApexHi will issue renounceable letters of allotment (`RLA`s`)in respect of the
consideration units. Prima, in anticipation of its winding up, will distribute
the RLA`s to its unitholders. In terms of the RLA`s, ApexHi will issue the
consideration units after transfer of Prima`s properties into the name of ApexHi
and after the record date for the ApexHi quarterly distribution period ending
the day prior to the effective date.
Prima unitholders will rank for income distributions in Prima until the
winding-up of Prima and as holders of the consideration units will rank for
income distributions in ApexHi from the effective date.
CONDITIONS PRECEDENT
The acquisition is subject to:
unconditional approval of the Competition Authorities;
the JSE`s approval for the listing of the consideration units, subject to
transfer of the Prima properties to ApexHi;
Prima unitholders approving the disposal; and
Prima unitholders and the Registrar of Collective Investment Schemes approving
the winding-up of Prima.
FINANCIAL EFFECTS OF THE DISPOSAL
Prima will announce the pro forma financial effects of the disposal after the
release by ApexHi of its audited results for the financial year ended 30 June
2005, which is scheduled for 4 August 2005.
The table below illustrates the effect of the disposal in the hands of Prima
unitholders, based on the respective closing prices of Prima and ApexHi units at
specified dates and the swap ratio of 5.9 ApexHi `A` units and 5.9 ApexHi `B`
units per 100 Prima units.
Before the After the %
disposal disposal Change
Consideration per unit 109,00 116,23 6,63%
(cents) based on unit
prices on 1 April 2005,
being the day prior to
the first Prima
cautionary relating to
the disposal
Consideration per unit 120,00 128,92 7,43%
(cents) based on unit
prices at 20 July 2005
INDEPENDENT EXPERT`S ADVICE AND BOARD`S RECOMMENDATION
As an independent expert, Sasfin Corporate Finance, a division of Sasfin Bank
Limited (`Sasfin`), has provisionally advised the board of PPTM that the
disposal is fair and reasonable to Prima unitholders. A copy of its signed
opinion letter will be in the circular to Prima unitholders referred to below.
After taking Sasfin`s advice, the independent director on the board of PPTM has
concluded that the disposal and winding up are in the best interests of Prima
unitholders and the board accordingly recommends they be approved by
unitholders.
SALIENT DATES AND TIMES FOR PRIMA UNITHOLDERS
Details of salient dates and times will be announced with the financial effects
of the disposal.
CIRCULAR TO UNITHOLDERS
A circular enclosing a notice convening a meeting of Prima unitholders,
including resolutions necessary to approve the disposal and winding up, will be
posted to Prima unitholders in due course.
FURTHER CAUTIONARY ANNOUNCEMENT
Pending announcement of the financial effects of the disposal, Prima unitholders
are advised to continue to exercise caution in their dealings in Prima units.
Rosebank
21 July 2005
Corporate advisor and sponsor to Prima
Java Capital (Proprietary) Limited
Attorneys to Prima
Fluxmans Attorneys Inc.
Independent expert
Sasfin Corporate Finance,
a division of Sasfin Bank Limited
Date: 21/07/2005 04:32:43 PM
Produced by the JSE SENS Department
