Battle for iProp intensifies.

Posted On Monday, 14 April 2003 02:00 Published by eProp Commercial Property News
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Rivals vying to acquire the assets of the iProp property group look set to go another round following the second postponement of an investors’ meeting to consider bids.

Property-Housing-ResidentialWhile there was some speculation that if the postponement of a decision-making general meeting from last Friday to 26 May would cut one of the bidders - the Mettle financial services company – out of the loop because its revised offer was due to expire yesterday, this has been denied.

On the contrary, says Mettle’s Andre van der Veen, it allows us the option of submitting another revised offer and “if anything it strengthens our hand.” He adds, however, that Mettle has still to decide whether it will indeed proceed with another offer. “We will make a decision during the course of this week.”

The purpose of the postponement, according to iProp’s board, is to allow it to properly circulate full details of the improved management offer which could then be compared with the revised Mettle offer. The contest to acquire the iProp assets began in January when Mettle subsidiary, Rowan Tree, and Clidet, owned by the iProp executives put in rival bids, both of which were subsequently reworked, for most of the iProp assets.

Clidet’s current offer, expiring at the end of June, stands at R67m for the whole of iProp other than 7m iFour linked units, while Mettle’s just-expired submission puts up to R92m on the table (but subject to certain downward adjustments) and excluding up to R33m in cash. The offers translate into R6.18 per iProp share from Clidet and R5.55 a share from Mettle. Prior to the cautionary in January, iProp shares were trading at R2.80, which according to the group chairman John Hall is a 70% discount to its net asset value of R10.79 a share.

Put simply he believes this discount is based on the time it will take to unlock the true potential of the assets. Van der Veen explains that Mettle was not knocked out of the running because the revised offer had not been accepted for consideration. “We have clarified the matter with the SRP and have clearance to put in another revised offer if we wish.

“I believe that this puts us on a strong footing if, indeed, we do decide to do so. We still like the iProp asset and are currently examining the matter with our independent advisers. He adds that should Mettle decide to proceed with a new bid it will be on a stronger footing than before because its offer will now be in sync with the other parties in the process.

Into the bargain he believes factors such as Mettle’s bank guarantees and the fact that investors will receive units in their own hands will make an “attractive comparison”. iProp MD Petro Heydenych, who admits that she’ll be waiting with “bated breath” for May 26, says Clidet has offered what it can to investors and it remains to be seen whether Mettle can, or will, top that.

“Obviously if they do it is because they believe they can unlock the value in the assets. That remains to be seen, we believe we can do so because of the knowledge we have built up over a long time working with the assets.”

Last modified on Tuesday, 06 May 2014 11:33

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