Pangbourne, iFour talk of partnership

Posted On Thursday, 13 March 2003 10:01 Published by eProp Commercial Property News
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Pangbourne Properties' move to increase its holdings of iFour linked units to 34% has sparked speculation that the group is looking to take out iFour's assets.


James TempletonThe merger of Pangbourne and iFour would create a property portfolio valued at about R2-billion.

A portfolio this size would be the envy of many property funds listed on the JSE Securities Exchange SA.

The two groups dismissed the speculation, and said they were looking to establish a business partnership that would keep them as separate entities going forward.

"There is enough space in the market for the two group's to exists as separate entities," said iFour MD Anthony Diepenbroek.

Pangbourne dumped about 2.8 million ApexHi Properties' B units and 32.9 million Grayprop units in exchange for 17.2 million iFour units in a deal valued at R102-million.

The group also went to the open market and acquired a further 1.8 million iFour linked units for about R9.3-million at an average price of 501 cents , boosting its iFour holdings to 34%.

But the move has raised questions in the market particularly why Pangbourne parted with its units in Grayprop and ApexHi for more iFour units.

Barnard Jacobs Mellet property analyst James Templeton said the decision made sense only if Pangbourne was looking to buy out iFour.

"You do not take a 34% stake in a company unless you plan to do something with it," said Templeton.

He said he would not be surprised if a takeover of iFour by Pangbourne followed at a later stage.

Pangbourne has been on an acquisiti ve spree in recent years," said Templeton.

"This would be a continuation of this strategy."

Pangbourne said in a statement that it had identified the iFour linked units as high-yielding instruments in a high-quality property portfolio.

The group said the swap of units in Grayprop and ApexHi for more iFour units represented only a realignment of strategic interests.

Diepenbroek said yesterday there was common vision between the management of the two groups.

He said Pangbourne could help to boost the financial muscle of iFour.

"This partnership is going to help us grow our assets," said Diepenbroek.

He said, however, that a merger was not on the agenda .

Diepenbroek said that iFour was looking to boost its property portfolio from R732m to more than R1bn in the near future.

"We are also encouraged by the strategic synergies between the two companies and the complementary nature of our skills," said Diepenbroek.

"We have a complementary approach to the way in which we run our businesses with, for example, an emphasis on in-house asset management."

Pangbourne's CEO Athol Campbell said in the statement that "with Pangbourne's assistance, iFour will be able to increase the size of its portfolio in the short term".

Pangbourne's unit price gained 3,2% or 22c to close at 700s on the JSE yesterday.

The iFour unit gained 5,5% or 29c to 550c.

Last modified on Wednesday, 07 May 2014 11:07

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