Property moves 
Viwe Tlaleane

   
THE proposed takeover bid of Spearhead by listed property loan stock company Redefine Income Fund is also set to benefit Redefine’s asset managers, Madison Property Fund Managers.

The R1,3bn takeover bid — subject to approval by regulatory authorities as well as the approval of the two companies’ unitholders — met with a positive response yesterday, with analysts saying it would benefit both Spearhead and Redefine.

And it seems both companies have already canvassed their unitholders, who, by and large, support the deal.

Madison said it had initiated the transaction in March and, after complex negotiations in a volatile market, a formal offer valued at R1,3bn was submitted.

The asset manager, which listed on the JSE early last month, said that on implementation it would benefit from the enhancement in Redefine’s enterprise value, on which it earns fees.

Madison will also benefit from a transaction fee.

As a property asset manager, Madison derives its income predominantly from the asset management of three listed property funds: Redefine Income Fund, ApexHi Properties and Hyprop Investments.

The property asset manager also revealed that it had been negotiating two other possible deals on behalf of Redefine.

Speculation had been that the two deals involved Paramount Property Fund (Paraprop) and Ambit Properties.

And there was general market consensus that Redefine’s bid for Paraprop was hostile, with Paraprop management unhappy about its overtures.

Although Madison executive director Marc Wainer did not name the parties that Madison had been negotiating with, he said the other two deals became “too difficult to consummate with unattractive ratios emerging in the changing market”, resulting in them being terminated.

Wainer said that the Redefine and Spearhead transaction made sense as the unit prices of both companies moved in tandem, and that a swap ratio including Redefine units for Spearhead units continued to work.