/SENS ANNOUNCEMENT 04 MARCH 2008
ACP / SYC - Acucap / Sycom - Joint Announcement Of Acquisition And Renewal Of Cautionary Announcement
Acucap Properties Limited
("Acucap")
Registration No. 2001/021725/06)
Share Code: ACP
ISIN Code: ZAE000037651
Sycom Property Fund
("Sycom" or "the Fund")
A Collective Investment Scheme in property registered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002 and managed by Sycom Property Fund Managers Limited
Registration number 1986/002756/06)
JSE Share code: SYC
ISIN: ZAE000019303
JOINT ANNOUNCEMENT OF ACQUISITION BY ACUCAP OF 17.5% OF SYCOM AND 50% OF SYCOM PROPERTY FUND MANAGERS LIMITED ("SPFM") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Unitholders of Acucap and Sycom are advised that the board of Attfund Limited ("Attfund") has agreed to sell 35.8 million units in Sycom ("the Sycom units") to Acucap ("the Sycom acquisition"), and that Parkdev (Proprietary) Limited ("Parkdev") has agreed to sell 50% of its shares in SPFM , 50% of its asset management agreement with SPFM and all of its property management business with SPFM to Acucap ("the SPFM acquisition") subject to all regulatory approvals. Although each transaction is with a separate seller, and although neither transaction is linked to or conditional upon the other, the two transactions will be more fully understood if disclosed together. For the purposes of this announcement, the two transactions will be referred to jointly as "the acquisitions". Sycom acquisition is effective immediately. The SPFM acquisition will become effective upon the fulfillment of the conditions precedent.
2. RATIONALE FOR THE ACQUISITIONS
The consolidation that has taken place in the listed property sector over recent years recognises the advantages accruing to larger funds, such as improved diversification, reduced asset concentration risk, the ability to access larger transactions, and enhanced liquidity in the market for listed units. Although the strategies of both Acucap and Sycom do not expressly refer to fund size, their boards recognise that scale is likely to have an influence on long-term performance, and accordingly they have remained open to appropriate consolidation opportunities.
Acucap and Sycom are similar in size, with portfolios of recognized quality, both consisting of a relatively small number of individually large assets, with a sectoral weighting towards retail. Their portfolios are geographically spread, principally between the Gauteng and Cape markets, although with negligible localised overlap between individual assets.
The boards of Acucap and Sycom recognise that there may be substantial benefits to unitholders in merging the two funds, not only because a merger would create a single large, well-balanced and diversified portfolio of high quality properties, but also because of potential synergies between the asset management teams of the respective funds. Accordingly, both boards have supported the acquisition by Acucap of a meaningful interest in Sycom, as well as the acquisition of an interest in SPFM that will result in the asset management teams of Acucap and Parkdev jointly managing Sycom's assets. Once the proposed new Real Estate Investment Trust(REIT) legislation comes into effect, Acucap and Sycom will consider the most suitable way to proceed with a merger of the two funds. In the interim Paul Theodosiou will, subject to the necessary regulatory approvals, join the board of SPFM as an executive director. Sycom unitholders will be advised when this appointment becomes effective.
Although Acucap will be represented on the Sycom board (through SPFM), the directors of Sycom and Acucap will continue to operate independently, and both boards will retain a non-executive majority. There will nevertheless be a high level of co-operation between the boards and their executive teams, particularly in the area of acquisitions, where both funds will be given equal opportunity to participate in new property deals.
3. TERMS OF THE SYCOM ACQUISITION
The principal terms and conditions of the Sycom acquisition are as follows:
3.1. The only suspensive condition was the approval of the boards of Acucap and Attfund, and both boards have duly given their approval, and therefore the Sycom acquisition is unconditional;
3.2 The consideration payable by Acucap for the Sycom units will be R22 per unit (the "consideration "), payable to Attfund by the issue of Acucap linked units (the "vendor consideration units");
3.3. Acucap will undertake to place the vendor consideration units on behalf of Attfund;
3.4 The price of the vendor consideration units to be issued by Acucap will be determined prior to the placement of the units, and with reference to the 30 day volume weighted average price of Acucap linked units at 21 February 2008 of R31.51, being the day prior to the issue of the Acucap cautionary announcement;
3.5 The Sycom units will rank pari passu for distributions with effect from 1 October 2007;
3.6 The Acucap vendor consideration units will similarly rank pari passu for distributions with effect from 1 October 2007.
4. TERMS OF THE PARKDEV ACQUISITION
The principal terms of the Parkdev acquisition are as follows:
4.1 The Parkdev acquisition is subject to the approval of the Competition Commission, the Financial Services Board, and the Trustee of the Sycom Property Fund;
4.2 The consideration payable by Acucap will be R207,776,000, payable in cash to Parkdev against the transfer of 50% of the shares in SPFM, 50% of the asset management agreement between Parkdev and SPFM, and all of Parkdev's property management business with SPFM.
5. ACUCAP FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
The financial effects of the acquisitions cannot be presented until the pricing of the vendor consideration units has been finalised. Acucap unitholders are therefore advised to continue exercising caution when dealing in Acucap securities, until a further announcement is made.
Johannesburg
4 March 2008
("Acucap")
Registration No. 2001/021725/06)
Share Code: ACP
ISIN Code: ZAE000037651
Sycom Property Fund
("Sycom" or "the Fund")
A Collective Investment Scheme in property registered in terms of the Collective Investment Schemes Control Act, No. 45 of 2002 and managed by Sycom Property Fund Managers Limited
Registration number 1986/002756/06)
JSE Share code: SYC
ISIN: ZAE000019303
JOINT ANNOUNCEMENT OF ACQUISITION BY ACUCAP OF 17.5% OF SYCOM AND 50% OF SYCOM PROPERTY FUND MANAGERS LIMITED ("SPFM") AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Unitholders of Acucap and Sycom are advised that the board of Attfund Limited ("Attfund") has agreed to sell 35.8 million units in Sycom ("the Sycom units") to Acucap ("the Sycom acquisition"), and that Parkdev (Proprietary) Limited ("Parkdev") has agreed to sell 50% of its shares in SPFM , 50% of its asset management agreement with SPFM and all of its property management business with SPFM to Acucap ("the SPFM acquisition") subject to all regulatory approvals. Although each transaction is with a separate seller, and although neither transaction is linked to or conditional upon the other, the two transactions will be more fully understood if disclosed together. For the purposes of this announcement, the two transactions will be referred to jointly as "the acquisitions". Sycom acquisition is effective immediately. The SPFM acquisition will become effective upon the fulfillment of the conditions precedent.
2. RATIONALE FOR THE ACQUISITIONS
The consolidation that has taken place in the listed property sector over recent years recognises the advantages accruing to larger funds, such as improved diversification, reduced asset concentration risk, the ability to access larger transactions, and enhanced liquidity in the market for listed units. Although the strategies of both Acucap and Sycom do not expressly refer to fund size, their boards recognise that scale is likely to have an influence on long-term performance, and accordingly they have remained open to appropriate consolidation opportunities.
Acucap and Sycom are similar in size, with portfolios of recognized quality, both consisting of a relatively small number of individually large assets, with a sectoral weighting towards retail. Their portfolios are geographically spread, principally between the Gauteng and Cape markets, although with negligible localised overlap between individual assets.
The boards of Acucap and Sycom recognise that there may be substantial benefits to unitholders in merging the two funds, not only because a merger would create a single large, well-balanced and diversified portfolio of high quality properties, but also because of potential synergies between the asset management teams of the respective funds. Accordingly, both boards have supported the acquisition by Acucap of a meaningful interest in Sycom, as well as the acquisition of an interest in SPFM that will result in the asset management teams of Acucap and Parkdev jointly managing Sycom's assets. Once the proposed new Real Estate Investment Trust(REIT) legislation comes into effect, Acucap and Sycom will consider the most suitable way to proceed with a merger of the two funds. In the interim Paul Theodosiou will, subject to the necessary regulatory approvals, join the board of SPFM as an executive director. Sycom unitholders will be advised when this appointment becomes effective.
Although Acucap will be represented on the Sycom board (through SPFM), the directors of Sycom and Acucap will continue to operate independently, and both boards will retain a non-executive majority. There will nevertheless be a high level of co-operation between the boards and their executive teams, particularly in the area of acquisitions, where both funds will be given equal opportunity to participate in new property deals.
3. TERMS OF THE SYCOM ACQUISITION
The principal terms and conditions of the Sycom acquisition are as follows:
3.1. The only suspensive condition was the approval of the boards of Acucap and Attfund, and both boards have duly given their approval, and therefore the Sycom acquisition is unconditional;
3.2 The consideration payable by Acucap for the Sycom units will be R22 per unit (the "consideration "), payable to Attfund by the issue of Acucap linked units (the "vendor consideration units");
3.3. Acucap will undertake to place the vendor consideration units on behalf of Attfund;
3.4 The price of the vendor consideration units to be issued by Acucap will be determined prior to the placement of the units, and with reference to the 30 day volume weighted average price of Acucap linked units at 21 February 2008 of R31.51, being the day prior to the issue of the Acucap cautionary announcement;
3.5 The Sycom units will rank pari passu for distributions with effect from 1 October 2007;
3.6 The Acucap vendor consideration units will similarly rank pari passu for distributions with effect from 1 October 2007.
4. TERMS OF THE PARKDEV ACQUISITION
The principal terms of the Parkdev acquisition are as follows:
4.1 The Parkdev acquisition is subject to the approval of the Competition Commission, the Financial Services Board, and the Trustee of the Sycom Property Fund;
4.2 The consideration payable by Acucap will be R207,776,000, payable in cash to Parkdev against the transfer of 50% of the shares in SPFM, 50% of the asset management agreement between Parkdev and SPFM, and all of Parkdev's property management business with SPFM.
5. ACUCAP FINANCIAL EFFECTS AND RENEWAL OF CAUTIONARY ANNOUNCEMENT
The financial effects of the acquisitions cannot be presented until the pricing of the vendor consideration units has been finalised. Acucap unitholders are therefore advised to continue exercising caution when dealing in Acucap securities, until a further announcement is made.
Johannesburg
4 March 2008
Transactional sponsor to Acucap
KPMG Services (Proprietary) Limited
Sponsor to Acucap
Java Capital (Proprietary) Limited
Java Capital (Proprietary) Limited
Corporate advisor and sponsor to Sycom
Nedbank Capital
Nedbank Capital
Legal advisor to Acucap and Sycom
Edward Nathan Sonnenbergs Inc
Edward Nathan Sonnenbergs Inc
Date: 04/03/2008 17:57:12 Produced by the JSE SENS Department.
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