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Spearhead - Acquisition Announcement
Spearhead Property Holdings Limited
(Incorporated in the Republic of South Africa)
(Registration number 1996/005827/06)
Share code: SPE ISIN: ZAE000019162
(`Spearhead` or `the company`)
ACQUISITION OF PIER PLACE
1. Introduction
Unitholders are advised that Spearhead (`the purchaser`) has entered into an
agreement with Pier Place (Pty) Limited (`the seller`) for the acquisition of
Erf 170 Roggebaai in the Municipality of Cape Town (`Pier Place` or `the
property`) (`the acquisition`), details of which are set out in paragraph 2
below.
2. The acquisition
2.1 Terms of the acquisition
Spearhead will acquire Pier Place from the seller, subject to the fulfilment of
the suspensive condition set out below, for a maximum purchase consideration of
R152.8 million (`the acquisition consideration`). The effective date of the
acquisition will be on fulfilment of the suspensive condition.
2.2 The acquisition consideration
The acquisition consideration is payable by Spearhead to the seller on the date
of registration of transfer of the property into the name of the purchaser and
will be satisfied as follows:
2.2.1 R15.96 million in cash (`the cash portion`); and
2.2.2 R136.84 million in the form of 6 220 000 new Spearhead linked units (`the
consideration units`) to be issued at a price R22 per linked unit (`the scrip
portion`).
Spearhead has undertaken to place the consideration units with financial
institutions, banks or other investors nominated by the company on behalf of the
seller (`the vendor placing`). The issue price of R22 per linked unit
represents a 4.5% discount to the weighted average traded price of linked units
on the JSE Limited (`the JSE`) for the 30 business days prior to 21 July 2005,
being the date the directors authorised the vendor placing.
2.3 Related party transaction
Certain of the consideration units will be placed with an existing Spearhead
unitholder, Ngatana Property Investments (Pty) Limited, holding 12.2% of the
company`s issued capital (`the related party placing`). The related party
placing therefore requires the opinion of an independent professional expert
acceptable to the JSE and unitholder approval.
2.4 The suspensive condition
The acquisition is subject to approval by the relevant Competition Authority.
2.5 Rationale for the acquisition
In line with Spearhead`s long-term objective to grow the quality of its
property portfolio and further enhance its tenant mix and diversity, the company
has embarked on a policy of selectively acquiring additional properties.
3. Pro forma financial effects
The pro forma financial effects of the acquisition are set out in the table
below and have been prepared for illustrative purposes only to provide
information on how the acquisition may have impacted on Spearhead. Because of
their nature, the pro forma financial effects may not give a fair reflection of
Spearhead`s financial position after the acquisition nor its effect on future
earnings.
Before the After the Percentage
acquisition1 acquisition change
Notes (cents) (cents) %
Basic earnings per linked unit (cents) 2 118.01 131.04 11.04
Headline earnings per linked unit (cents) 2 117.55 130.65 11.14
Weighted average number of linked
units in issue (`000) 20 353 23 463
Net asset value per linked unit (Rand) 3 14.36 16.07 11.90
Number of linked units in issue (`000) 21 586 27 806
Notes:
1. Extracted from Spearhead`s reviewed in terim results for the six months ended
31 December 2004.
2. The basic earnings and headline earnings per linked unit in the `After the
acquisition` column are based on the following assumptions:
* the acquisition is effective 1 July 2004;
* the cash portion is funded by borrowings;
* interest on the borrowings was incurred at an effective rate of 9% per annum;
and
* the consideration units are issued on 1 July 2004 at an issue price of R22
per linked unit.
3. The net asset value per linked unit in the `After the acquisition` column is
based on the following assumptions:
* the acquisition is effective 31 December 2004;
* the cash portion is funded by borrowings;
* the consideration units are issued on 31 December 2004 at an issue price of
R22 per linked unit.
4. Documentation
A circular containing details of the acquisition, the independent professional
expert`s opinion, and incorporating a notice of general meeting, will be posted
to unitholders in due course.
Cape Town
11 August 2005
Sponsor
BRIDGE CAPITAL
Reporting accountants and auditors
PKF
Accountants & business advisers
PKF (Newlands) Inc.
Chartered Accountants (SA)
Registered Accountants and Auditors
(Registration number: 2000/013319/21)
Date: 11/08/2005 01:47:15 PM
Produced by the JSE SENS Department
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