By Tiisetso Motsoeneng

Property group Redefine Income Fund, which owns just over 10% of CBS Property Fund (CBS), said the offer by the Public Investment Corporation (PIC) to acquire CBS appeared attractive.

"At first glance, the offer made by PIC to acquire CBS appears to be an attractive option for unitholders," said Brian Azizollahoff, Redefine Income Fund CEO.

Earlier, CBS announced that government's investment vehicle planned to buy it for 12 rand per linked unit - valuing the company at just under 2 billion rand.

The PIC, which acts on behalf of government's Employees Pension Fund, already holds about 13.1% of the listed property loan stock.

"All we can say at the moment is that the offer looks attractive but there are processes that we still have to go through," said Martin Ettin, CBS executive director.

The offer represents a premium of 16% to the price of CBS linked unit at the close of business on February 1, 2007, being the date prior to the release by CBS of a cautionary announcement.

"In the event of Redefine accepting this offer, Redefine would be making a substantial capital profit on its holdings in CBS. That said, we must still consider it very carefully, as Redefine is in the same position as a number of the large investors in the sector that have expressed disfavour with taking cash in exchange for listed units.

There are constraints as to where one can invest cash. It is already difficult to find sizeable quantities of listed stock, so a number of investors are sitting with cash piles that are not being ideally utilised," said Azizollahoff.

He added: "Further, a number of unitholders, including those who concur with the previous comment, have intimated that they are not supportive of seeing a contraction of the number of counters available in and market capitalisation of the sector. As such, a transaction of this nature is not advantageous to investors in the sector."

A bid by Redefine Income Fund to acquire CBS has been the source of market speculation for some time.

"Whilst we are disappointed that this property acquisition did not come to fruition from our side, Redefine is reviewing the offer and, as always, will act in the best interests of its unitholders," said Azizollahoff.

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