Madison Property Fund Managers, one of South Africa’s largest property managers, will open its offers in respect of 130 million Madison linked units at 500 cents per linked unit, amounting to R650 million, on Thursday, 25 May.
Madison is set to list under the Real Estate Holdings and Development sub-sector of the JSE Limited on Wednesday 7 June 2006, with a 10% forecast forward yield, and will be the first listing of a property asset management company in South Africa.
Madison manages listed property funds ApexHi Properties Limited, Hyprop Investments Limited and Redefine Income Fund Limited, with a combined market capitalisation in excess of R15 billion and combined enterprise value over R20 billion.
Based on the Listed Property Sector - Annual Review issued by Catalyst Fund Managers (Pty) Ltd, the three listed property funds managed by Madison were in the top four performers in the listed property sector in 2005: Redefine first with a total return of 91%; ApexHi B units third with a total return of 65%; and Hyprop fourth with a total return of 63%.
Madison was launched in 2000 by property doyens Marc Wainer and Wolf Cesman. Wainer is regarded as the foremost property dealmaker in South Africa with over 30 years of experience in property asset management, development and property management and Cesman has 38 years’ experience in property asset management, development and property management. The business created and listed two of the most innovative and successful property funds in South Africa – Redefine and ApexHi.
Madison is structured similarly to the listed property loan stock companies, with unitholders investing in linked units and receiving two income distributions a year in the form of interest payments on the variable rate debentures.
Investment in Madison will be made available by private placement and a public offer which is limited to linked unitholders of ApexHi, Hyprop and Redefine registered on 31 March 2006.
The private placement, which is open from Thursday, 25 May until noon on Friday 2 June, is in respect of the issue and sale of R350 million of Madison linked units, comprising 70 million linked units at 500 cents per linked unit.
The public offer, which is only open to unitholders of Hyprop, ApexHi and Redefine registered on 31 March 2006, is open from Thursday, 25 May until noon on Friday 2 June and is in respect of R300 million of Madison linked units, comprising 60 million linked units at an issue price of 500 cents per unit.
“The public offer provides the unitholders of the funds managed by Madison with the opportunity to invest in a potentially high-yielding instrument in the listed property sector and to participate in the management fees earned from the asset management of the underlying funds in which they are invested,” note Cesman and Wainer.
Results of both offers will be published on Tuesday, 6 June 2006.
The listing of Madison will also facilitate the introduction of meaningful black economic empowerment and 20 million Madison linked units, at an aggregate issue price of R100 million will be acquired as part of the private placement by Clearwater Capital, a black owned and controlled group. After listing this will comprise approximately 10.6% of the total number of linked units in issue. Clearwater Capital is a KwaZulu-Natal based investment company.
The board of directors will consist of executive directors Wainer and Cesman and three non-executive directors, Harishkumar Kantilal Mehta, Monica Khumalo and Bernard Nackan.
“The listing of Madison will create a foundation for the further growth of the business and provides Madison the ability to attract and retain intellectual capital and ensure adequate succession planning through the incentive of meaningful, tradeable equity participation,” explains Cesman.
Wainer elaborates that it also provides Madison with the flexibility of listed currency in the context of merger and acquisition activity within the property sector.
Copies of the prospectus providing full details of the offer have been posted to unitholders of the Madison Funds who requested postage. Additional copies of the prospectus are available from Thursday 25 May 2006 at the following addresses:
In Johannesburg from: Madison Property Fund Managers.
