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ApexHi also in the market for MICC's assets

Posted On Monday, 27 September 2004 02:00 Published by eProp Commercial Property News
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Rival offer to Vukile may be attractive

Marc WainerListed property loan stock heavy weight ApexHi Properties said yesterday it would be interested in acquiring the property portfolio of fellow company MICC Property Income Fund.

If ApexHi decided to make an offer for the portfolio and MICC unitholders found it attractive, it could scupper rival Vukile Property Fund's bid for MICC.

If an ApexHi bid were successful the combined entity would become the fourth-largest listed property loan stock company by market capitalisation.

ApexHi chairman Marc Wainer confirmed ApexHi "would be interested in acquiring MICC's property portfolio" and said it had sent a letter to MICC's board .

Wainer would not elaborate further on the matter.

Vukile notified MICC's board of its takeover proposal on September 6, saying it had received acceptances of the offer from unitholders owning 40,5% of MICC's issued linked units.

It said that Sanlam, which holds 15% of MICC's issued linked units, was among the unitholders accepting the offer.

Sanlam also holds a large stake in Vukile and was promoter of the MICC and Vukile listings.

Vukile is offering 12 Vukile linked units for every 10 MICC linked units and says the implied value of the offer is 600c a unit.

MICC was listed in October last year with a market capitalisation of R391m.

Vukile listed six months later, with a market capitalisation of R942m.

Since the takeover proposal for MICC was announced, MICC CEO Greg Chalmers and nonexecutive director Pieter Ebersohn both resigned .

Chalmers, whose resignation came a few days after the announcement, confirmed at the time that the two had a fundamental difference of views with that of MICC's board over the company's future direction.

Andisa Securities property analyst Len van Niekerk said MICC's portfolio would complement that of ApexHi .

Van Niekerk said 60% of MICC's portfolio consisted of retail properties and ApexHi was looking at increasing its retail exposure to spread its risk.

But, he said, MICC's Namibian property portfolio which made up 13% of the company's total portfolio in terms of the gross area it had to let might not fit in with ApexHi's portfolio and could be sold.

If ApexHi made an offer for MICC, the unitholders' decision on which offer to accept could be swayed by three things, one of which would be the price offered.

Van Niekerk said a second factor would be the way such an offer was structured.

ApexHi, if it made an offer, could offer a combination of cash and units in ApexHi for the portfolio. Vukile has only offered units for all those of MICC .

"A third thing is how attractive from MICC's point of view would it be, to be a unitholder in Vukile or ApexHi," he said.

Van Niekerk said MICC unitholders would probably favour ApexHi units over Vukile units because ApexHi was significantly larger than Vukile and a far more liquid fund.

Property analysts agree that larger listed property funds are more attractive to investors because size results in increased liquidity and tradability.

MICC has fallen 4,3% since Vukile's bid announcement.


Last modified on Monday, 12 May 2014 15:20

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