There is market speculation the two companies, which already have a close relationship, may ultimately merge into one .

The acquisition of 6,4% of the issued linked units in Acucap from Sanlam Investment Management for R50,5-million will increase Resilient's interest in Acucap to 16%. Since Resilient's directors also own a 4% stake in Acucap, Resilient's total interest in Acucap now rises to 20%.

A merger of the two would make sense, said analysts, because Acucap MD Paul Theodosiou and Resilient MD Des de Beer both have places on each other's boards.

Theodosiou has been a member of Resilient's board since it listed in December 2002, while De Beer has been a member of Acucap's board since its listing in March 2002. Acucap has a Cape Town-based portfolio while Resilient is rural and north-based.

De Beer said yesterday the rationale behind the acquisition of the further stake in Acucap was to "formalise the already close relationship which exists between the two companies".

He would not be drawn on any speculation about a possible merger, saying he could not comment at this stage.

In terms of the Acucap deal, Resilient will acquire, with effect from Wednesday, 3,845,000 Acucap linked units.

The acquisition will be settled through the issue of 4,484,581 Resilient-linked units at R7,52 each, and the balance of R16,8-million will be paid in cash.

The acquisition of the additional interest in Acucap would raise Resilient's market capitalisation to just under R900-million and assets of just more than R1,1-billion.

If the two companies merged into one fund, it would have a market capitalisation of about R1,7-billion and assets worth more than R2-billion.

A larger entity would be attractive to institutional investors because its size would result in increased liquidity and tradability, said analysts.