Vukile and Apexhi in bid for MICC

Posted On Wednesday, 01 December 2004 02:00 Published by eProp Commercial Property News
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The competition between two listed rival property groups Vukile Property Fund (VKE) and Apexhi properties to get a lion's share of listed property group MICC Property Income Fund (MCP), (APE) remains tight and far from over.

Laurence Rapp VukileVukile and Apexhi are both bidding to acquire a 100% stake in MICC.

Vukile (VKE) on Monday said that the proposed merger between itself and MICC would benefit both firms through an extended asset base, better risk diversification and improved operational efficiencies.

This is the rationale advanced in Vukile's offer document for the acquisition of all of MICC's issued capital for a consideration of 126 new Vukile linked units for every 100 MICC linked units.

Vukile has obtained unconditional approval from the Competition Tribunal for its offer to acquire the entire issued capital of MICC.

The remaining conditions are the approvals required from the JSE Securities Exchange South Africa, the Securities Regulation Panel and Vukile's unitholders.

Vukile also has agreements of sale from 61.7% of MICC's linked unitholders.

Meanwhile, ApexHi is offering to buy all MICC units for a consideration of 36 ApexHi A units and 36 ApexHi B units for every 100 MICC units, or R320 in cash, 18 ApexHi A and 18 ApexHi B units.

ApexHi's offer for MICC is higher than Vukile's and the group is still talking to shareholders.

Vukile argues that its offer is a better one, compared to Apexhi's paper premium of 6% and 3% at November prices.

Vukile added that the Apexhi linked unit currently trades at 58% premium to Net Asset Value (NAV), the largest out of any property encounter while it trades at 5% premium to NAV.

The group claims that accepting its offer will improve NAV per MICC linked unit from R5.00 to R6.14, which represents a 23% increase, while the Apexhi offer represents a drop of 13% in NAV per MICC linked unit from R5.00 to R4.34.

Asked about its liquidity problems, Vukile avoided the question saying limited tradability of units is an investor issue.

"Management in conjuction with major unit holders are addressing unit holder spread and liquidity will improve," Vukile said.

The group said that if it acquires 100%, it will merge MICC into its own business, but if it gets at least a controlling stake of 62% it would manage MICC either through the appointment of executive directors or an outsourced management contract.

 

Last modified on Wednesday, 14 May 2014 12:16

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