Bids for MICC unlikely to succeed

Posted On Thursday, 02 December 2004 02:00 Published by eProp Commercial Property News
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There seems little chance of either the Vukile Property Fund or ApexHi Properties succeeding in their takeover bids for full control of the MICC Property Income Fund.

Gerald LeissnerCape Town - There seems little chance of either the Vukile Property Fund or ApexHi Properties succeeding in their takeover bids for full control of the MICC Property Income Fund.

Vukile has indicated that it has received support for its offer from about 62 percent of MICC's unitholders.

Meanwhile, Gerald Leissner, the chief executive of ApexHi, said this week that his firm had accumulated 12 percent of MICC's shares from a number of shareholders.

He said ApexHi's intention was to increase the shareholding even further, up to as much as 30 percent, as it would give the company greater leverage as far as their voting pool in MICC was concerned.

Hence, there was no chance of Vukile enforcing a buyout of minorities, as this required at least 90 percent of the shareholding.

Len van Niekerk, a property analyst at Andisa Securities, said Vukile and ApexHi would end up with almost all the shares in MICC, leaving very little free-float to be traded.

Therefore, it would not make strategic sense for MICC, which has a market capitalisation of about R450 million, to remain listed. A delisting could be followed by the splitting of the property assets between the two firms.

Leissner said the other option was for ApexHi and Vukile to come to an agreement on the properties held by MICC and that these then could be exchanged in return for ApexHi and Vukile linked units.

MICC would then change from being a unitholder of properties to a unitholder of ApexHi and Vukile linked units.

It was ApexHi's intention from the start to get its hands on the MICC property portfolio and that ultimately it would have to sit down with Vukile to see what the best way forward for MICC would be, Leissner said.

Vukile posted details on its takeover offer to MICC unitholders on Monday, setting out reasons why its takeover bid was better than that of ApexHi.

In the circular, Gerhard van Zyl, the chief executive of Vukile, allayed fears of the limited tradeability of Vukile shares.

Both Vukile and Sanlam, which holds 67 percent of the shares in Vukile, had committed themselves to improving the unitholder spread following the conclusion of the offer, Van Zyl said.

Although ApexHi's offer was between 3 percent and 6 percent higher than Vukile's, this was immaterial when compared with the improved benefits that Vukile had to offer, he said.

Vukile linked units closed unchanged at R5.51 on the JSE Securities Exchange yesterday, while MICC was 5c higher at R6.85. ApexHi units declined by 5c to close at R9.60.

The real estate index was 0.63 percent higher.

Last modified on Wednesday, 14 May 2014 12:40

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