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INGENUITY PROPERTY INVESTMENTS LTD - Announcement regarding the acquisition of properties

Release Date: 07/12/2012 09:39
Code(s): ING     PDF:  
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Announcement regarding the acquisition of properties

INGENUITY PROPERTY INVESTMENTS LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2000/018084/06)
ISIN: ZAE 000127411 JSE share code: ING
(“Ingenuity” or “the Company”)

ANNOUNCEMENT REGARDING THE ACQUISITION OF PROPERTIES

1.   Introduction

     Ingenuity shareholders are advised that the Company has entered into an agreement (“the
     Agreement”) with Annenprop 4 Proprietary Limited (“Annenprop” or "the Seller"), in terms of
     which Ingenuity will acquire the rental enterprises, including the properties situated at and
     known as 14 Dreyer Street, Claremont, Cape Town and 72 Main Road, Claremont, Cape Town
     (“the Properties") (“the Acquisition”).

     The Acquisition will become effective on transfer which is expected to be on or about 1 March
     2013 (“the Transfer Date”).

2.   Rationale for the Acquisition

     The Properties have been acquired in line with the Company’s strategy to build a quality
     portfolio of assets focused in the Western Cape

3.   Consideration for the Acquisition

     The total consideration for the Acquisition is R82 million (“the Purchase Consideration”). The
     Purchase Consideration will be discharged by Ingenuity as follows:

     3.1     by the issue of a renounceable letter of allotment to the Seller for Ingenuity shares (“the
             Consideration Shares”), up to the value of 50% of the Purchase Consideration and the
             Seller being obliged to renounce the Consideration Shares to a renouncee(s) (“the
             vendor placement”). The Consideration Shares will be issued at a price equal to the 30
             day weighted average price of Ingenuity shares traded preceding the approval by the
             board of directors of Ingenuity of the Acquisition, or at such other price as may be
             determined by the board of directors of Ingenuity; and

     3.2     by the payment of the balance of the Purchase Consideration in cash.

     The Purchase Consideration is payable on the Transfer Date.

4.   Conditions precedent

     The Acquisition is subject to fulfilment or waiver of the following conditions precedent:

     4.1     the Company obtaining mortgage finance acceptable to discharge the Purchase
             Consideration;

     4.2     the board of directors of the Company approving, in writing, the Acquisition;

     4.3     the Company being satisfied, in its sole discretion, with the results of a comprehensive
             due diligence;

     4.4     the Company obtaining any regulatory consents; and
    
     4.5     the Seller’s shareholders approving the Acquisition in accordance with the provisions of
             section 112 of the Companies Act, No 71 of 2008.

5.   Property specific information relating to the Properties

                                                                                          Weighted
                                                                Gross
                                                                          Single or        average           Purchase     Value of the
                                                              lettable
     Property                  Location           Sector                     Multi-     net rental      Consideration       Properties
                                                                  area
                                                                          tenanted          per m2                Rm            Rm (1)
                                                                    m2
                                                                                                R

     Erf 170930,
     Cape Town,
     City of Cape
     Town,
     Western Cape
                   14 Dreyer Street,          Retail, with
     (registered                                               6 214             S         76.24
                         Claremont                offices
     consolidation
     of erven
     170961 and
     58083, Cape
     Town)
     Erf 55499,
     Cape Town,
                     72 Main Road,
     City of Cape                                  Retail        800             M         94.03
                         Claremont
     Town,
     Western Cape
     Total                                                     7 014                                            82            82.5



     1.    The Properties have been valued by the directors of the Company using the capitalisation of rental method. The
           Properties will be valued by an independent valuer as part of the due diligence process.


6.   Unaudited pro forma financial effects ("Financial Effects") of the Acquisition

     Based on Ingenuity's audited consolidated results for the year ended 31 August 2012
     ("Results"), the Financial Effects of the Acquisition on Ingenuity's earnings per share (EPS”) and
     headline earnings per share (“HEPS”) are set out below. The Financial Effects are prepared for
     illustrative purposes only, and because of their nature, may not give a fair presentation of
     Ingenuity's financial position or the effect and impact of the Acquisition. The Financial Effects
     are the responsibility of Ingenuity's board.

                                                              Before the          After the    Change
                                                           Acquisition(1)   Acquisition (3)         %

      EPS (cents)                                                    9.0                8.6      (4.0)
      HEPS (cents)                                                   1.6                1.9       20.8
      Total shares in issue                                  738 550 000        805 763 115
      Shares and weighted shares in issue net of             645 573 057        712 786 172
      treasury shares


     Notes:

     1.   Based on Ingenuity’s Results.
     2.   In calculating the Financial Effects, it was assumed that the Acquisition was implemented on 1 September 2011
          for statement of comprehensive income purposes.

     3.   In calculating the Financial Effects, the weighted average price for the 30 day period preceding this
          announcement of R0.61 per Ingenuity share has been used, and assuming 50% of the Purchase Consideration
          being discharged by the Consideration Shares.
     4.   The number of shares has increased by 67 213 115 as a result of the shares being issued in terms of the vendor
          placement.
     5.   The financial effects of the Acquisition on net asset value per share and net tangible asset value per share have
          not been disclosed as these are insignificant.


7.   Categorisation of the Acquisition

     The Acquisition is categorised as a Category 2 transaction in terms of the JSE Limited Listings
     Requirements.


7 December 2012

Cape Town


Investment bank and Sponsor
Nedbank Capital

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