HYPROP WINS VOTE OF CONFIDENCE FROM UNITHOLDERS
More than 60% of Hyprop’s unitholders earlier today voted in favour of Hyprop’s takeover bid for rival property fund SA Retail, despite Marriot’s contention that Hyprop’s inability to secure a majority stake in SA Retail would cause unitholders to vote against its bid.
Hyprop MD Pieter Prinsloo says that unitholder confidence is based on the knowledge that a stake in SA Retail will be earnings-enhancing for Hyprop. He adds that “should Hyprop secure a significant stake in SA Retail it will add strategic value to the fund, as it did when effectively blocking the unfavourable proposed deal between SA Retail and Martprop.”
He allays concerns that a situation in which Hyprop owns a non-majority stake in SA Retail may prejudice Hyprop unitholders. “A significant strategic stake is the initial step to achieving a stronghold in SA Retail,” says Prinsloo. He remains upbeat about Hyprop’s prospects. “SA Retail unitholders who were negative towards Hyprop’s bid may reconsider the benefits of our offer in light of our unitholder support, and accept our offer in due course.” He also dismisses the concern raised previously of a double-fee management structure should Hyprop’s bid succeed. “There will be no double asset management fee structure,” he says.
Prinsloo says that Hyprop will apply its proven expertise in asset management to optimise returns on the SA Retail portfolio, as it has successfully done to date in its own portfolio. In June 2005 Hyprop announced an 18% hike in distributions to 91 cents for the six months to June 2005, reflecting the results of the latest independent IPD Index that ranks Hyprop as number 1 over a one, three, five and seven year period for the best total return on direct property investment.
Hyprop’s offer to SA Retail unitholders remains subject only to Competition Commission approval. Hyprop is set to release interim results to June 2005 in August.