| Wed 19 Jul 2006, 15:00 | | Calulo /Pangbourne - Conditional acquisition by Pa |
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Calulo /Pangbourne - Conditional acquisition by Pangbourne of a 40.6% interest
in Calulo
CALULO PROPERTY FUND LIMITED
(Formerly Annuity Property Fund Limited)
(Incorporated in the Republic of South Africa)
(Registration no. 1987/006274/06)
Share code: CLO & ISIN: ZAE000060711
("Calulo")
PANGBOURNE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1987/002352/06)
Share code: PAP & ISIN:ZAE000005252
("Pangbourne")
- CONDITIONAL ACQUISITION BY PANGBOURNE OF A 40.6% INTEREST IN CALULO;
- NOTICE OF FIRM INTENTION TO MAKE A MANDATORY OFFER TO CALULO MINORITY
LINKED UNITHOLDERS;
- NOTIFICATION TO CALULO LINKED UNITHOLDERS OF AN APPLICATION BY PANGBOURNE
TO THE SECURITIES REGULATION PANEL ("SRP") TO OPEN THE OFFER TO MINORITIES
ONCE THE AGREEMENTS ARE UNCONDITIONAL; AND
- FURTHER CAUTIONARY ANNOUNCEMENT TO CALULO LINKED UNITHOLDERS
INTRODUCTION
Calulo linked unitholders ("Calulo unitholders") are referred to the
announcement dated 24 May 2006 wherein it was announced that Matemeku Property
Acquisitions 104 (Pty) Limited ("Matemeku") had acquired a total of 36 641 418
linked units, comprising 40.6% of the issued linked units in Calulo ("the
Matemeku interest") and would proceed with a mandatory offer to Calulo minority
unitholders ("the Matemeku minority offer") in terms of the Securities
Regulation Code on Takeovers and Mergers ("the Code"). .
Subsequent to the abovementioned change in control, Matemeku has entered into an
agreement with Pangbourne to sell the Matemeku interest to Pangbourne ("the
Pangbourne Matemeku acquisition"), subject to the approval of the Competition
Tribunal in terms of the Competition Act, 1998, which is the only outstanding
condition precedent to this transaction. This acquisition will result in a
further change in control of the company and accordingly, should the condition
precedent to the Pangbourne Matemeku acquisition be satisfied, Pangbourne will
be required to make a mandatory offer to Calulo minority unitholders ("the
Pangbourne minority offer"), which offer will supersede the Matemeku minority
offer.
Pangbourne has also concluded agreements to acquire the company providing asset
management services to Calulo and a property management business including the
contract to provide property management services to Calulo, referred to in more
detail in paragraph 2 below (collectively, together with the Pangbourne Matemeku
acquisition, referred to as "the Pangbourne acquisitions").
SALIENT TERMS OF THE PANGBOURNE ACQUISITIONS
Pangbourne has agreed to acquire the Matemeku interest from Matemeku at a price
of 300 cents per linked unit, payable in cash once the Pangbourne acquisitions
become unconditional. It is anticipated that the approval of the Competition
authorities should be received by the end of September 2006.
In addition, Matemeku will be entitled to receive the distribution by Calulo to
its unitholders in respect of the period ended 30 June 2006, together with an
amount equal to the pro rata proceeds of the distribution for the period ending
31 December 2006, calculated from 1 July 2006 to date of transfer of the
Matemeku interest to Pangbourne, both of which, it is anticipated, will be
calculated and will be payable in accordance with Calulo"s normal distribution
policies and practices. It is anticipated that the Calulo distribution for the
six-month period ending 31 December 2006 will be declared and paid during March
2007.
Pangbourne has concluded agreements to acquire 50% of the shares and related
shareholders" claims in Calulo Asset Management (Proprietary) Limited ("CAM"),
the asset manager of Calulo, from Mr A L Morze for a purchase consideration of
R7 400 000 and the balance of the shares in CAM from Calulo Properties
(Proprietary) Limited ("Calulo Properties") and Mr R J Harman for an aggregate
purchase consideration of R6 500 000 with a top-up payment to a maximum of R5
000 000 to be made by no later than 31 July 2007, based on financial performance
("the CAM agreements").
Pangbourne has also concluded an agreement to acquire the property management
business of Calulo Property Management (Proprietary) Limited, including the
property management agreement for Calulo, for a purchase consideration of R16
500 000 ("the property management agreement").
The CAM agreements and the property management agreement are subject to the
Pangbourne Matemeku acquisition becoming unconditional.
RATIONALE FOR THE PANGBOURNE ACQUISITIONS
The Pangbourne acquisitions will give Pangbourne a significant stake in another
listed property fund. Pangbourne intends injecting an office property portfolio
into Calulo as part of a "bulking up" exercise, which is expected to take place
during the first half of 2007, subject to the necessary approvals being
obtained. This is in line with its strategy of holding significant interests in
specialised listed property funds, of which Calulo will comprise the office
component. The acquisitions in terms of the CAM agreements and the property
management agreement are in line with Pangbourne"s strategy of managing the
portfolios in which it holds significant interests.
The Pangbourne acquisitions promote Pangbourne"s long-term objective of
achieving sustainable growth in distributions. It also advances Pangbourne"s
strategy without incurring the costs of a listing of a new fund on the JSE
Limited and allows Pangbourne to leverage off its existing property management
and administration infrastructure.
FINANCIAL EFFECTS FOR PANGBOURNE
The pro forma financial effects of the Pangbourne acquisitions on Pangbourne"s
earnings, headline earnings, distribution, net asset value and tangible net
asset value per Pangbourne combined unit are not significant.
THE MANDATORY OFFERS TO CALULO MINORITY UNITHOLDERS
In terms of the Code, the Pangbourne Matemeku acquisition constitutes an
affected transaction. Pangbourne will accordingly be obliged to extend an offer
to the Calulo minority unitholders to acquire all or part of their Calulo linked
units on the same terms applicable to the Pangbourne Matemeku acquisition. In
terms of the Pangbourne minority offer, Calulo minorities will receive the
distributions from Calulo on the same basis as Matemeku, as specified in
paragraph 1 above.
Confirmation has been provided to the satisfaction of the SRP that sufficient
resources are available to Pangbourne to meet its commitments in terms of the
Pangbourne minority offer.
The SRP has agreed that, given the circumstances, the Matemeku minority offer
need not proceed unless the Pangbourne minority offer is not completed. In the
event that the Matemeku minority offer is required to be reinstated, an interest
adjustment will be made to take account of the delay.
It is the intention of Pangbourne for Calulo to remain listed on the JSE Limited
and accordingly, in the event and to the extent applicable, any entitlement by
Pangbourne in terms of Section 440K of the Companies Act, 1973, to the
compulsory acquisition of the Calulo linked units of any Calulo minority
unitholder will not be enforced by Pangbourne.
APPLICATION TO THE SRP TO DELAY THE OPENING OF THE PANGBOURNE MINORITY OFFER
UNTIL THE PANGBOURNE ACQUISITIONS BECOME UNCONDITIONAL
In order to avoid the situation arising that Calulo minority unitholders who
elect to accept the Pangbourne minority offer may have to wait several weeks
until the Competition Tribunal"s determination is known, Pangbourne has made
application to the SRP to permit a deviation from rule 27.1 of the Code, to open
the offer once the Pangbourne acquisitions have become unconditional ("the SRP
application").
The SRP has approved Pangbourne"s application, subject to there being no
objections from Calulo minority linked unitholders.
Calulo unitholders who wish to object to the SRP application must forward their
written objections to the SRP by not later than close of business on Friday, 21
July 2006, to e-mail rconnellan@srp.co.za, or telefacsimile number (011) 482
5635, or by hand to The Executive Director, Securities Regulation Panel, 2
Sherbourne Road, Parktown, 2193.
OPINIONS AND UNDERTAKINGS
Sasfin Capital, a division of Sasfin Bank Limited, has been appointed by the
board of directors of Calulo to advise it on the Pangbourne minority offer.
Sasfin"s opinion will be contained in the offer circular to be sent to Calulo
unitholders in due course.
Micawber 398 (Proprietary) Limited, which holds approximately 18% of the Calulo
linked units, has undertaken in writing not to accept the Pangbourne minority
offer.
FURTHER CAUTIONARY ANNOUNCEMENT FOR CALULO UNITHOLDERS
An announcement regarding inter alia the outcome of the SRP application will be
made in due course. Calulo unitholders are accordingly advised to exercise
caution in dealing in their Calulo linked units until a further announcement is
made.
Sandton
19 July 2006
Sponsor and independent adviser to Calulo
Sasfin Capital
A division on Sasfin Bank Limited
Sponsor to Pangbourne
Standard Bank
Legal adviser to Calulo
Cliffe Dekker
Legal adviser to Pangbourne
Edward Nathan (Pty) Limited
Date: 19/07/2006 05:22:22 PM Produced by the JSE SENS Department
