HYPROP CLOSES OFFER ON 44,4% OF SA RETAIL PROPERTIES
Leading listed retail property loan stock Hyprop Investments today announced the positive outcome of its offer to unitholders of rival fund SA Retail Properties, which closed on Friday 9 September 2005. A total of 37,8% of unitholders in SA Retail accepted the offer. This includes the prior acceptance of the offer by Redefine Income Fund which held 25% of SA Retail units. Adding to this the 6,6% of SA Retail units purchased by Hyprop on the open market prior to the offer, Hyprop now owns a significant 44,4% stake in SA Retail.
31,5% of SA Retail unitholders elected to swap their SA Retail units for combined units in Hyprop, with 6,4% choosing the cash offer of R8 a unit equating to a cash payout of R114,7 million.
Managing Director Pieter Prinsloo says that “the acceptance of the offer reflects the confidence of investors in Hyprop’s track record of sustainable growth and their wish to participate in the continuing upside of our successful asset management”.
Breaking down the results of the offer Prinsloo explains that only a small percentage of individual unitholders in SA Retail did not accept Hyprop’s offer. “We had anticipated that Whirlprops, Old Mutual and Marriot were unlikely to accept the offer. According to Marriot these companies together account for 52% of SA Retail’s unitholding,” he says. “Added to the 44,4% stake we now own in SA Retail this amounts to 96,4%, leaving only 3,6% of independent investors who elected to retain their units in SA Retail.”
He says that strategically the acceptance gives Hyprop a strong platform from which to drive future earnings growth and to unlock asset value in SA Retail. “With the offer having closed on Friday we are now considering a number of options available to us as a result of our significant stake in SA Retail,” he says.
Prinsloo points out that 26,3 million Hyprop combined units were issued to facilitate the acceptance of Hyprop’s offer by SA Retail unitholders, boosting Hyprop’s market capitalisation by R680 million to more than R3,7 billion at the current trading price of around R26. This makes Hyprop the third largest listed property loan stock after Growthpoint and Grayprop.