Hyprop board opposes Redefine offer

Posted On Thursday, 05 August 2010 02:00 Published by eProp Commercial Property News
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Redefine Properties' planned acquisition of Hyprop Investments has been set back after Hyprop's board recommended that shareholders reject the offer.

Paul DuncanJSE-listed property loan stock group Redefine Properties’ planned acquisition of retail-focused Hyprop Investments was set back yesterday when Hyprop’s board recommended that shareholders reject the offer.

Hyprop said yesterday its board had determined that the offer was not “fair” following an assessment of an independent review conducted by Deloitte & Touche Corporate Finance.

It said the review, considering the offer’s terms and conditions and based on their valuation procedures, recommended a fair value offer range of R54 R58 per Hyprop combined unit.

The mandatory offer by Redefine at R50 per combined unit was triggered as a result of its proposed acquisition of 19,687-million Hyprop combined units from Coronation Asset Management.

If approval is received, Redefine’s stake in Hyprop will increase from 33,3% to 45,2% and this would trigger a mandatory offer to remaining Hyprop unitholders.

But Redefine Properties executive director Brian Azizollahoff said the company believed that it had made its offer at the right price.

“Admittedly, the Hyprop market price of R52 has moved against Redefine when we initially made the offer of R50. What this in all probability translates to is that Hyprop unitholders will not accept Redefine’s offer. However, we have one Hyprop unitholder, Coronation, who has accepted our offer and the Competition Commission has given an approval,” he said.

Mr Azizollahoff said should Redefine unitholders vote in favour of the company’s resolutions at a meeting on August 12, then the company’s shareholding in Hyprop would go from 33,3% to 45,2% because of its acquisition of Coronation’s shares.

Evan Jankelowitz from Stanlib property franchise, which is a major shareholder in both Hyprop and Redefine, said: “Of course it is not the right price. If two of the best deal makers in this country, Marc Wainer and Wolf Cesman, who has since left Redefine, tell you they want to pay R50, then obviously they see an upside.”

Catalyst Fund Managers investment manager Paul Duncan said Hyprop’s rejection of the offer was not surprising since “it is not a realistic offer considering that the market has moved up since Redefine’s offer was made to what it is today”.

Hyprop argued that it was a niche retail property fund with sought-after, quality assets and growth potential.

It said the nature and quality of the Redefine and Hyprop portfolios differed considerably.

Combining its assets with Redefine’s would dilute the overall quality of the underlying portfolio of assets held by existing Hyprop combined unitholders.

Last modified on Tuesday, 22 April 2014 19:36

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