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ACUCAP PROPERTIES LIMITED - Announcement of offer by Acucap to acquire all Sycom Units in issue and withdrawal of cautionary announcement

Release Date: 27/03/2014 07:07
Code(s): ACP SYC     PDF:  
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Announcement of offer by Acucap to acquire all Sycom Units in issue and withdrawal of cautionary announcement

Acucap Properties Limited 
(Incorporated in the Republic of South Africa) 
(Registration number 2001/021725/06) 
Share code: ACP 
ISIN: ZAE000037651 
(Approved as a REIT by the JSE) 
("Acucap") 
                     
Sycom Property Fund 
A Collective Investment Scheme in Property 
("CISP") registered in terms of the Collective 
Investment Schemes Control Act, No. 45 of 2002 
("CISCA") and managed by Sycom Property Fund 
Managers Limited 
(Registration number 1986/002756/06) 
Share code: SYC         ISIN: ZAE000019303 
(Approved as a REIT by the JSE) 
("Sycom") 

ANNOUNCEMENT OF OFFER BY ACUCAP TO ACQUIRE ALL THE SYCOM PARTICIPATORY 
INTERESTS NOT HELD BY ACUCAP (OR ITS SUBSIDIARY) AND WITHDRAWAL OF 
CAUTIONARY ANNOUNCEMENT 
 
1. INTRODUCTION 
The board of directors of Acucap is pleased to announce that it will, in terms of a document 
that will be posted to holders of participatory units in Sycom ("Sycom Units") on or about 31 
March 2014 ("Offer Document"), extend an offer to all holders of Sycom Units ("Sycom 
Unitholders"), other than Acucap and its wholly-owned subsidiary, Sycom Property Fund 
Managers Limited ("SPFM"), to acquire all their Sycom Units ("Offer Units") in exchange for 
Acucap securities (as described in paragraph 4.2, in the ratio of 58 Acucap securities for 
every 100 Sycom Units held on the closing date of the Offer ("Exchange Ratio"), on the terms 
and conditions set out in the Offer Document and as summarised below ("Offer").  
 
2. INVOLVEMENT OF SYCOM AND SPFM 
The board of directors of SPFM, being cognisant of its fiduciary responsibilities to Sycom 
Unitholders, has, on a voluntary basis, established a committee of independent board 
members ("the Sycom Independent Board") to ensure sound corporate governance 
practice. The single purpose of the Sycom Independent Board is to consider the terms of the 
Offer and to provide Sycom Unitholders with its opinion thereof.  For this reason, this 
announcement is being made jointly by Acucap and Sycom. 
 
3. RATIONALE FOR THE OFFER 
Acucap's status as a Real Estate Investment Trust ("REIT") was approved by the JSE Limited 
("JSE") with effect from 1 April 2013. Acucap carries on the business of a property holding 
company through the ownership of investment properties by its subsidiaries and investees, 
including Sycom, in which it currently holds 33.39% directly. Acucap also holds 100% of the 
shares in SPFM, the manager of Sycom. 

The implementation of the Offer may result in Acucap acquiring up to 100% of the Sycom 
Units in issue, thereby resulting in Sycom becoming wholly-owned by Acucap, effectively 
merging the organisations and the property portfolios ("Enlarged Acucap"). 

Acucap believes that implementation of the Offer will bring a number of benefits to Acucap's security holders (whether holders of linked units shares, ("Acucap Security Holders") and Sycom 
Unitholders. These benefits include, inter alia: 

    3.1. Sycom's property portfolio is complementary to that of Acucap, Therefore the  Enlarged 
         Acucap, following successful implementation of the Offer, will enjoy greater sectoral 
         diversification and reduced asset concentration risk;
  
    3.2. the Enlarged Acucap will offer a single entry-point for investors which may result in 
         the attraction of interest from a wider group of investors including tracker funds 
         and international investors. In addition, the Enlarged Acucap's increased market 
         capitalisation will increase its representation in the listed property index (FTSE/JSE 
         South African Listed Properties Index), as compared to the current individual 
         representation of Acucap and Sycom. Mutual funds and tracker funds that track the 
         index, or investors that include any form of index weighting in their investment 
         strategy, are thereafter expected to adjust their portfolios in favour of the Enlarged 
         Acucap. This increased interest is expected to have a positive impact on the 
         Enlarged Acucap's rating and liquidity thereby enhancing its ability to raise capital 
         for meaningful acquisitions; 

    3.3. those Sycom Unitholders that accept the Offer will hold their investment in an 
         entity with a greater investor spread as compared to Sycom wherein Acucap already 
         directly holds 33.39% of the Sycom Units; 

    3.4. the Enlarged Acucap is expected to achieve operational synergies post the 
         implementation of the merger that include, inter alia, cost efficiencies, streamlining 
         of operations, more efficient allocation of senior management's time and the 
         alignment of strategic objectives. The acquisition by Acucap of up to 100% in Sycom 
         will increase the critical mass of the asset base of the Enlarged Acucap. The 
         significantly larger asset base will allow for increased redevelopment opportunities, 
         as the asset/s being redeveloped will comprise a smaller percentage of the total 
         asset base, and will reduce any dilution of returns during the redevelopment 
         phases. Furthermore, a larger asset base and balance sheet will provide reach into 
         larger transactions, allowing the Enlarged Acucap to optimise the composition of its 
         property portfolio and grow the overall size of the portfolio through acquisitions of 
         meaningful scale, which is in line with the strategy of owning a smaller number of 
         individually significant assets;  and 

    3.5. if Acucap acquires 100% of the Sycom Units in issue that are not already owned by 
         it, then it is Acucap's intention to procure the delisting and ultimate winding-up or 
         other form of restructure of Sycom in the most efficient manner.  Pursuant to this 
         ultimate step, the external management company would cease to exist, resulting in 
         a better aligned and investor friendly corporate structure with fewer possible 
         conflicts of interest. As the management team is the same for both organisations, 
         Sycom Unitholders can be assured there will be no dilution in performance and, in 
         fact, this should enhance returns as there will be no requirement for the 
         maintenance of a second listing on the JSE and for having dual regulators, with its 
         concomitant costs.  
  
4.   TERMS OF THE OFFER 

     4.1. The Exchange Ratio 
         In terms of the Offer, each Sycom Unitholder that accepts the Offer on or before the 
         closing date of the Offer ("Accepting Sycom Unitholder") will, subject to fulfilment 
         of all conditions precedent thereto, ultimately receive securities in Acucap, in the 
         ratio ("Exchange Ratio") of 58 Acucap securities for every 100 Sycom Units held 
         ("Offer Consideration"). 

         The Exchange Ratio has been determined by Acucap as the closest approximation 
         and best representation of the ratios between: 

       4.1.1. the ratio of the historical distributions declared by Acucap per linked unit in  
              Acucap ("Acucap Linked Unit") as compared to the historical 
              distributions declared by Sycom per Sycom Unit in respect of the previous 
              three financial years; 

       4.1.2. the historical volume weighted average share price of Acucap Linked Units and 
              Sycom Units respectively, in respect of the previous twelve month period; and 
       4.1.3. the expected average forecast distributions per Acucap Linked Unit and Sycom 
              Unit for the next five financial years.
 
        The Exchange Ratio represents a premium of 1.2% to the ratio calculated as the 30 day 
        volume weighted average JSE trading price ("VWAP") of Sycom Units at close of trade on 
        24 March 2014 to the 30 day VWAP of Acucap Linked units as the same date.

        If Acucap does not acquire 100% of the Sycom Units in terms of the Offer and an 
        opportunity to acquire additional Sycom Units arises after the closing date of the 
        Offer, Acucap undertakes that it will not in such event acquire these additional 
        Sycom Units at a more favourable exchange ratio than the Exchange Ratio of 58 
        Acucap securities per every 100 Sycom Units without first obtaining the support 
        from Sycom Unitholders that held such number of Sycom Units that represents at 
        least 50% of the Offer acceptances and, to the extent required,  Acucap Security 
        Holders and applicable regulators.  

     4.2. Nature of the Offer Consideration 
         Acucap currently has a linked unit capital structure in terms of which each par value 
         share in Acucap ("Acucap Share") is indivisibly linked to a subordinated debenture 
         ("Acucap Debenture"), forming an Acucap Linked Unit. 

         In a separate announcement released on SENS immediately prior to this 
         announcement, Acucap proposed to holders of Acucap Linked Units ("Acucap Linked 
         Unitholders"), that a restructure be implemented pursuant to which it will through a 
         scheme of arrangement and the adoption of a new Memorandum of Incorporation, 
         convert its linked unit structure into an all equity structure ("Acucap Restructure").
 
         Acucap Linked Unitholders are referred to the aforementioned announcement for 
         further detail on the Acucap Restructure. 

         The Acucap Restructure is subject to, inter alia, approval by Acucap Linked 
         Unitholders by way of both ordinary and special resolutions as well as the necessary 
         filing being made at the Companies and Intellectual Properties Commission.  

    The nature of the Offer Consideration is therefore dependent on the 
    implementation of the Acucap Restructure. If the Acucap Restructure is approved 
    and implemented, the Offer Consideration will take the form of no par value shares 
    in Acucap at the Exchange Ratio. Whereas, if the Acucap Restructure is not 
    approved or implemented for any reason, the Offer Consideration will take the form 
    of Acucap Linked Units at the Exchange Ratio.  
     
4.3. The Offer period 
    The Offer will open for acceptances at 9:00 on 31 March 2014 and will be open for 
    acceptances by Sycom Unitholders at any time during such period until 12:00 on 
    Friday, 16 May 2014 ("Offer Closing Date"). 

    Acucap may, in its absolute and sole discretion, extend the Offer Closing Date. Any 
    extension to the Offer Closing Date will be announced on SENS and published in the 
    South African press. 
     
4.4. Sycom Receipts 
    In order to allow for the implementation of the Acucap Restructure and facilitate 
    payment of the Final Distributions (as discussed in paragraph 6), the Offer 
    Consideration will be issued to Accepting Sycom Unitholders on the later of – 

   4.4.1.    30 June 2014; or 
 
   4.4.2.    the first Monday following 15 business days after the date on which all 
             conditions precedent to the Offer are fulfilled and/or, where possible, 
             waived, 

   ("Consideration Pay Date"). 

    In order to ensure that Accepting Sycom Unitholders are not out of the market and 
    so are able to trade between the Offer Closing Date and the Consideration Pay Date, 
    Accepting Sycom Unitholders will be issued an acknowledgement of receipt in 
    respect of each such Sycom Unit tendered into the Offer ("Represented Sycom 
    Unit"), which receipt will constitute a tradable acknowledgement of the ownership 
    of that Represented Sycom Unit ("Sycom Receipt"), in a ratio of one Sycom Receipt 
    for every Represented Sycom Unit.  The Sycom Receipts will in all respects reflect 
    ownership of the underlying Sycom Unit and be fully tradable on the JSE under 
    share code SYCR and ISIN ZAE000189551. The Sycom Units of Accepting Sycom 
    Unitholders that are tendered into the Offer, will, in turn, be placed into an escrow 
    account with Computershare Investor Services (Pty) Ltd ("Escrow Account") on the 
    date of issue of the Sycom Receipts, where they will be held for ultimate delivery to 
    Acucap on the Consideration Pay Date.  

    Each holder of a Sycom Receipt on the Consideration Pay Date (which may be the 
    original Accepting Sycom Unitholder or a transferee) will be entitled to the Offer 
    Consideration and the Represented Sycom Units will be transferred to Acucap.  
 
    4.5. Conditions precedent to the Offer 
        The Offer is subject to the fulfilment or, where applicable, waiver, of the following 
        conditions precedent: 

         4.5.1.   the approval by holders of Acucap Shares ("Acucap Shareholders") of an 
                  ordinary resolution authorising Acucap to acquire the Offer Units in terms 
                  of section 9 of the JSE Listings Requirements; 
         4.5.2.   the approval by Acucap Linked Unitholders of special resolution/s 
                  authorising Acucap to issue the Offer Consideration; 
         4.5.3.   the approval by the JSE of the listing of the Sycom Receipts and the Offer 
                  Consideration; and 
         4.5.4.   other regulatory approvals and consents to the extent necessary. 
        
5. RISKS TO SYCOM UNITHOLDERS THAT DO NOT ACCEPT THE OFFER 

The Sycom Independent Board has identified various risks to Sycom Unitholders associated 
with not accepting the Offer, particularly that: 

    5.1. it is Acucap's stated intention to acquire 100% of the Offer Units. However, given 
         that the Offer is not regulated in terms of parts B and C of Chapter 5 of the 
         Companies Act, 2008 ("the Act") (relating to the takeover provisions), as it is not an 
         offer in respect of a "regulated company" as contemplated therein, there are no 
         "squeeze-out" or compulsory acquisition mechanisms applicable to the Offer as 
         contemplated in section 124 of the Act. Although Acucap may succeed in acquiring 
         90% or more of the Offer Units sought to be acquired by Acucap, it will in such 
         event not be in a position to compulsorily acquire, pursuant to the Offer, the Sycom 
         Units of those remaining Sycom Unitholders who do not accept the Offer; 

    5.2. given the inability of Acucap to "squeeze-out" the remaining Sycom Unitholders 
         who fail to accept the Offer, there is a risk that Sycom remains listed on the JSE with 
         the remaining Sycom Unitholders holding an interest in a substantially less liquid 
         counter that in turn may affect the price at which the Sycom Units trade and may 
         affect the ease with which Sycom Unitholders are able to dispose of their Sycom 
         Units; and 

    5.3. furthermore, if Acucap is unsuccessful in acquiring 100% of the Offer Units such 
         that, after the Offer, the Sycom Units held by Sycom Unitholders other than Acucap 
         and SPFM comprise less than 20% of the total Sycom Units in issue, the JSE may 
         require SPFM to take steps to suspend and ultimately terminate the listing of Sycom 
         for failure to comply with the JSE's ongoing public spread requirements, although it 
         is likely that the JSE and the Registrar of Collective Investment Schemes appointed 
         in terms of the CISCA would be mindful of the interests of minority Sycom 
         Unitholders in such circumstances. 
 
6. DISTRIBUTIONS 
As set out in paragraph 4.4 of this announcement, the Consideration Pay Date is expected to 
be on or after 30 June 2014. Given that the Exchange Ratio has been determined based on, 
inter alia, forecast distributions with effect from the financial year commencing 1 April 
2014, Acucap and Sycom will each declare the final distributions for the 6 month period 
ended 31 March 2014 ("the Final Distribution") immediately prior to the Consideration Pay 
Date. Pertinent dates relevant to the Final Distribution are set out in paragraph 12 below. 
 
Acucap Linked Unitholders registered as such on the Friday immediately prior to the 
Consideration Pay Date ("Final Distributions Record Date") will be entitled to the Final 
Distribution declared by Acucap. Similarly, Sycom Unitholders registered as such on the Final 
Distributions Record Date will be entitled to the Final Distribution declared by Sycom.  
 
7. OPINION AND RECOMMENDATIONS 
The Sycom Independent Board has appointed Rand Merchant Bank (a division of FirstRand 
Bank Limited) ("the Independent Expert") to provide it with an opinion on whether the Offer 
is fair and reasonable to Sycom Unitholders. 
 
Having considered the terms and conditions of the Offer and based on the assumptions set 
out in its report, the Independent Expert has concluded that the Offer is fair and reasonable 
to Sycom Unitholders. 

The Sycom Independent Board has a responsibility to act in the interests of Sycom 
Unitholders and, as a consequence of this responsibility and for purposes of sound 
corporate governance, has voluntarily resolved to provide Sycom Unitholders with its 
opinion on the merits of the Offer. To this end, the members of the Sycom Independent 
Board have taken into consideration, amongst other things, the Independent Expert's 
opinion, the Sycom Independent Board's understanding of the businesses of Acucap and 
Sycom, the terms and conditions of the Offer and Acucap's rationale for the Offer, which 
sets out the commercial rationale for a consolidation of these two entities into one 
organisation with the same management team.  The Sycom Independent Board has also 
considered the risks in respect of not accepting the Offer. 

On the basis of the analysis undertaken by the members of the Sycom Independent Board, 
further details of which will be contained in the Offer Document, they are all of the opinion 
that the Offer is fair and reasonable to Sycom Unitholders. The Sycom Independent Board 
accordingly recommends that Sycom Unitholders accept the Offer. 
     
8. INDICATIVE SUPPORT  
Acucap Linked Unitholders, collectively holding 32% of all Acucap Linked Units, have expressed indicative 
support for all resolutions necessary to implement the Acucap Restructure and the Offer.

Furthermore, Sycom Unitholders, holding in aggregate 33% of the Offer Units, have indicated their willingness 
to accept the Offer.

9. PROPERTY SPECIFIC INFORMATION 
Details of the Enlarged Acucap property portfolio at 1 April 2014 are set out below: 

                                                                                                                                  Original 
                                                                                                           Weighted 
                                                                                                                                  purchase 
                                         Valuation as at         Rentable   Property                   average                         Effective date 
      Property            Location                                                           Valuer                              price/ 
                                              1 April 2014             area  portfolio                rental per                          of acquisition 
                                                                                                                               development 
                                                                                                              month 
                                                                                                                                      cost 
                                                     R'000               m2                                 R/m2                 R'000 
Retail                                         10 218 475          517 666                               130.53             5 280 673 
                            Kempton 
Festival Mall                                   1 560 000           80 521          A          1        113.75               652 059       2002-03-01 
                               Park 
Bayside Centre           Milnerton             1 100 000           45 630          A          2        147.01               787 969       2007-08-01 
Key West               Krugersdorp             1 038 000           55 396          A          1        123.51               544 822       2002-03-01 
Gardens Centre           Cape Town               490 000           14 530          A          2        224.02               348 506       2007-08-01 
Howard Centre            Pinelands               290 000           14 780          A          2        137.30               245 633       2007-08-01 
The Village Square     Randfontein               338 000           20 723          A          1        121.96               142 918       2002-03-01 
Westville Mall              Durban               271 000           12 533          A          1        139.24               210 715       2007-08-01 
East Rand Value 
Mall                       Boksburg               212 000           13 869          A          1        115.95               153 253       2006-03-03 
                          Somerset 
Helderberg Hyper                                  227 350           21 323          A          2         78.21              189 883       2007-08-01 
                               West 
14th Avenue Hyper       Roodepoort               205 000           26 146          A          1         70.17              103 875       2006-04-25 
50% Hillcrest 

Corner                       Durban               185 500            9 923          A          1        145.30               154 041       2007-06-01 
Sunward Centre            Boksburg               162 000           11 890          A          1        126.55                44 713       2001-12-01 
27,5% of The                   
                               Port                180 242           12 803          A          1        100.34                66 931       2004-10-01 
Bridge                   Elizabeth 
                      Fricker Road,                                             
Boulevard Piazza                                    6 000                            A          1        133.34                 7 528       2007-08-01 
                             Illovo                                     497 
50% of Fourways      William Nicol 
Crossing Retail             Drive,               496 500           24 413          S          1        134.79               140 293       2003-03-31 
Centre                    Fourways 
                           Louwtjie 
                            Rothman 
42% of N1 City Mall                               619 080           27 109          S          1        135.15               177 344       2003-03-31 
                            Street, 
                          Goodwood 
                       Cecile Road, 
Paarl Mall                                        733 000           37 038          S          1        139.65               486 877       2007-01-31 
                              Paarl 
77.86% of Vaal      Vanderbijlpark
                                                 1 012 803           38 829          S          1        157.09               787 969       2007-08-01 
Mall                                 
                        Greenacres,                                              A: 50%
100% of 
                               Port           1 035 000**           40 767      and S:         1        174.94             1 016 000      2014-03-31* 
Greenacres 
                          Elizabeth                                                 50% 
                       Inanda Road, 
50% of Watercrest 
                          Waterfall                57 000            8 946          S          1         60.04                35 344       2012-12-18 
Mall 
                       (Kloof area) 
Offices                                         6 136 150          321 242                               149.03             4 056 880 
                                                                                   A:60% 
Tygerberg Office                                                                                                                              A: 2010-07-17 
                             Parow                547 700           27 594        and          1        143.68               462 750 
Park                                                                                                                                          S: 2010-03-31 
                                                                                  S:40%^ 
Golf Park                 Mowbray                222 000           16 682          A          2        120.38               191 624       2007-08-01 
Microsoft,              Bryanston                211 000            9 432          A          1        150.06               138 269       2007-08-01 
82 Grayston Drive, 
                           Sandown                122 000            6 522          A          1        162.54              131 057       2007-08-01 
Sandown 
Tiger Brands            Bryanston                138 400            6 418          A          1        136.16              100 402       2007-08-01 
28 Fricker Road, 
                            Illovo               101 500            6 406          A          1        157.73                98 311       2006-04-01 
Illovo 
Bogare, Menlyn           Pretoria                113 000            6 301          A          1        127.26               45 159       2001-12-06 
Nautica, Granger 
                         Cape Town                100 000            5 791          A          2        169.52               42 859       2001-12-01 
Bay 
Pharos House, 
                            Durban                 99 000            5 825          A          1        135.48                50 564       2007-08-01 
Westville Mall 
4 Fricker Road, 
                            Illovo                 91 000            4 610          A          1        169.52               75 146       2007-08-01 
Illovo 
The Village, Faerie 
                          Pretoria                 84 200            6 910          A          1        120.24               48 222       2002-03-01 
Glen  
 
SA Weather 
                          Pretoria                85 800           4 270          A          1        115.94                37 927       2004-11-01 
Services 
36 Fricker Road, 
                            Illovo                 75 700           4 442          A          1        165.58               31 265       2004-01-01 
Illovo 
16 Fricker Road, 
                            Illovo                 66 500            3 658          A          1        136.33               66 462       2007-08-01 
Illovo  
Albion Springs,        Rondebosch                44 550            3 327          A          2        166.38               41 291       2007-08-01 
Bremerton Office             Port 
                                                    59 300           3 643          A          1        123.50               24 981       2001-12-01 
Park                    Elizabeth 
Advocates'          Protea Place, 
                                                  126 500           7 163          S          1        133.16               57 547       2003-03-31 
Chambers                  Sandton 
                        Foreshore, 
ENS Building                                      323 000          18 288          S          1        163.60               215 396       2007-01-31 
                         Cape Town 
                          Georgian 
Georgian Crescent       Crescent,                 85 000            6 433          S          1        135.87                44 844       2003-03-31 
                         Bryanston 
Harrowdene Office       Woodmead, 
                                                   780 000           42 080          S          1        143.13               345 044       2004-10-01 
Park                      Sandton 
Riverwoods Office    Civin Drive, 
                                                   155 000           10 873          S          1        140.32                43 400       2003-03-31 
Park                  Bedfordview 
The Woodlands           Woodmead, 
                                                 2 505 000          114 574          S          1        159.35             1 764 360       2012-12-21 
Office Park               Sandton 
Industrial                                        430 950           30 141                                67.10               161 987 
20% of N1 Business 
                           Midrand                160 000           15 298          A          1         66.96               78 295       2007-12-01 
Park 
30% of White Road 
Joint Venture,          Cape Town                24 450            4 065          A          2         83.51                19 300       2009-01-08 
Retreat 
25% of Montague 
                         Cape Town                246 500           10 778          A          1         61.12               64 392       2006-12-19 
Business Park 
TOTAL                                          16 785 575          869 049                               136.73             9 499 540 
 
* Transfer of the Greenacres property remains subject to conveyancing, but is expected imminently.
** As at 31 December 2013.
^ Calculated based on pro rata rentable area.
A. Part of the Acucap property portfolio.
S. Part of the Sycom property portfolio.
1. Valued by P. Parfitt of Quadrant Properties (Pty) Ltd, an independent registered valuer, registered in terms of the Property
   Valuer's Professional Act, No. 47 of 2000.
2. Valued by MRB.Gibbons of MillsFitchet Magnus Penny CC, an independent registered valuer registered in terms of the
   Property Valuer's Professional Act, No. 47 of 2000. 
 
10. FORECAST FINANCIAL INFORMATION 
Depending on the number of Offer acceptances, Acucap may, following the implementation 
of the Offer, obtain control of Sycom (where "control" bears the meaning as defined in 
IFRS 10) and accordingly, Sycom is consolidated into the Acucap group results from 
1 May 2014, on the assumption that all conditions precedent are fulfilled or waived on or before 
5 May 2014 (being the date of the general meeting of Acucap Shareholders and holders of Acucap 
Debentures (:Acucap Debenture Holders") ("Acucap General Meetings")).
 
In light of the above, the forecast financial information has been prepared on the Enlarged 
Acucap, assuming that Acucap acquires 100% of the Sycom Units in issue and therefore that 
Sycom is consolidated into the Enlarged Acucap for the 11 months commencing on 
1 May 2014. 
 
Accepting Sycom Unitholders will no longer be invested directly in Sycom but will instead 
acquire an indirect interest in Sycom through an investment in the Enlarged Acucap. The 
forecast financial information of the Enlarged Acucap may therefore be useful to Sycom 
Unitholders in evaluating whether to accept the Offer in respect of all, some or none of their 
Sycom Units.  
 
The table below sets out the forecast financial information in respect of:  
 
    (i)     Acucap for the 12 months ending 31 March 2014 ("Acucap 2014 Forecast");  
    (ii)    Sycom for the 12 months ending 31 March 2014 ("Sycom 2014 Forecast"); and 
    (iii)   the Enlarged Acucap for the 12 months ending 31 March 2015 (including the 
            consolidation of Sycom for the 11 months from 1 May 2014 as discussed above) 
            ("Enlarged Acucap 2015 Forecast"), 
             
(collectively ,"the Summary Forecast Financial Information") 
 
The Summary Forecast Financial Information has been extracted from the forecast 
statement of comprehensive income of Acucap and Sycom, as included in the circular to 
Acucap Linked Unitholders to be dated on or about 31 March 2014 ("Circular") 
("Forecast Financial Information") and should be read in conjunction with the Forecast 
Financial Information and the independent reporting accountants' report thereon, as set 
out in the Circular. 
 
This Summary Forecast Financial Information, the Forecast Financial Information, the 
assumptions on which the Forecast Financial Information is based and the financial 
information from which the Forecast Financial Information is prepared, are the 
responsibility of the directors of Acucap. 
                                                                         
                                                                                   2014                        2015 
                                                                        Acucap 2014    Sycom 2014     Enlarged Acucap 
                                                                          Forecast      Forecast       2015 Forecast 
                                                                             R'000          R'000                R'000 
 
Revenue                                                                    670 393        662 445            1 388 564
Operating expenses                                                        (52 960)      (140 461)            (205 296)
Net rental and related revenue                                             617 434        521 984            1 183 267
Investment income                                                           29 580         19 306               19 889
Fair value changes                                                         801 045        467 384                    -
Net finance costs                                                        (735 817)      (124 820)            (376 827)
Loss on disposal of interest in associate                                        -              -            (272 717)
Loss on de-recognition of SPFM management contract                                -              -            (245 109)
Gain on acquisition                                                              -              -            1 014 414
Profit before taxation                                                    712 248         883 853            1 322 918
Taxation                                                                   (4 039)          (556)                    -
Profit for the period                                                     708 209         883 297            1 322 918 
Fair value gain on listed investment                                      (77 898)              -                    -
Net change in fair value of derivative instrument at fair                    
                                                                            15 254          34 881                    -
value through profit and loss 
Other comprehensive income net of taxation                                 (62 644)         34 881                    - 
Total comprehensive income net of taxation                                 645 565         918 178            1 322 918
Adjusted for accounting allocations**                                     (83 202)      (499 603)            (463 101)
Sycom distributable earnings for the month of April                       
                                                                                  -              -               29 475
2014 not consolidated for accounting purposes*** 
 
Distributable earnings                                                    562 363         418 575              889 292
Basic and diluted earnings per share/Acucap no par                         404.48          441.36               538.03
value share (cents) 
Basic and diluted headline earnings per share /Acucap                70.67          230.93                    -
no par value share (cents) 
Distribution per share/Acucap no par value share                            321.80          184.19               343.06
Number of shares/Acucap no par value shares in issue              183 511         200 131              260 740
('000) 
Number of Acucap no par value shares in issue net of                      
those shares issued in terms of the BEE transaction*               175 090         200 131              252 319
('000) 
Weighted average number of Acucap no par value                             
shares in issue ('000)                                                    175 090         235 474              245 883

*Earnings per Acucap no par value share is calculated net of 8 420 994 Acucap no par value shares held by Thesele Group 
Proprietary Limited ("Thesele") that were issued pursuant to a BEE transaction in 2006. Due to restrictions placed on 
Thesele's ability to dispose of these Acucap no par value shares and the surety provided by Acucap to the financier of the 
BEE transaction, these Acucap no par value shares are treated as not having been issued for accounting purposes. 
 
**Comprises straight-lining adjustments, fair value adjustments (in respect of 2014 only) and loss on disposal of interest in 
associate, loss on de-recognition of SPFM management contract and gain on acquisition (in respect of 2015 only). 
 
***Acucap is entitled to the distributable earnings in respect of Sycom for the 1 month ending 30 April 2014. As a result of 
this the distributable earnings in respect of Sycom for the 1 month ending 30 April 2014 is included in the calculation of the 
distributable earnings amount in respect of the Enlarged Acucap for the 12 months ending 31 March 2015.  

 
Notes and assumptions: 
The basis of preparation and selected assumptions used in the compilation of the Summary Forecast 
Financial Information (as required in terms of section 13.11(b)(ii) of the JSE Listings Requirements) are set 
out below. Acucap Linked Unitholders are referred to the Forecast Financial Information contained in the 
Circular for all assumptions on which the Forecast Financial Information and Summary Financial Information 
has been derived. 

    1.   The Summary Forecast Financial Information has been prepared on the assumption that all 
         regulatory requirements have been fulfilled in respect of the Acucap Restructure on or before 
         1 May 2014.
 
    2.   The Enlarged Acucap 2015 Forecast has been prepared based on the assumption that the holders of 
         all the Offer Units accept the Offer and the financial results of Sycom are consolidated into the 
         Enlarged Acucap with effect from 1 May 2014 (i.e. for 11 months). Net profit of R28.03 million in 
         relation to Sycom for the 1 month ended 30 April 2014 is therefore not included in the forecast net 
         profit of the Enlarged Acucap for 2015 (as this is earned by Sycom prior to the assumed effective 
         date of 1 May 2014). Further detail on Sycom's forecast results for the 1 month ended 30 April 2014 
         are included in the Circular. 

    3.   As Acucap will acquire the Offer Units cum distribution (i.e. the Offer Units will qualify for the full 
         distribution for the six months ended 30 September 2014, including the month of April 2014), the 
         distributable income of the Enlarged Acucap for the 2015 financial year is calculated after adding in 
         the distributable income of Sycom for the month of April 2014. 

    4.   The Summary Forecast Financial Information has been prepared utilising the accounting policies of 
         Acucap and is based on the following: 

             a.   budgets prepared by the property management of Acucap; 
             b.   the historical financial information of Acucap and Sycom ("Historical Financial 
                  Information"); and 

             c.   the Acucap directors' knowledge of and experience in the property industry. 
    5.   Contracted revenue comprises rental income (net of straight lining adjustments) and expense 
         recoveries from existing tenants and has been based on existing lease agreements for the duration 
         of such agreements. 

    6.   Uncontracted revenue in respect of the Summary Forecast Financial Information is as follows:
 
             a.   Acucap 2014 Forecast: 9.45% of total gross rental income of Acucap for the 12 months 
                  ending 31 March 2014; 
             b.   Sycom 2014 Forecast: 8.85% of the total gross rental income of Sycom for the 12 months 
                  ending 31 March 2014; and 
             c.   Enlarged Acucap 2015 Forecast: 29.46% of the total gross rental income of the Enlarged 
                  Acucap for the 12 months ending 31 March 2015. 

    7.   Operating expenses are based on the Historical Financial Information, supplier service contracts 
         (where available) and the Acucap directors' knowledge of and experience in the property industry. 

    8.   Finance costs are calculated using the effective interest rate per loan agreement over the period of 
         the forecasts.  

 
    9.   Distributable earnings are calculated assuming that the following will be declared to Acucap Security 
         Holders as a distribution: 

             a.   Acucap 2014 Forecast: Not less than 99% of the Acucap distributable income for the 12 
                  months ending 31 March 2014; 
             b.   Sycom 2014 Forecast: 100% of the Sycom distributable income for the 12 months ending 
                  31 March 2014; and
             c.   Enlarged Acucap 2015 Forecast: 100% of Enlarged Acucap distributable income for the 12 
                  months ending 31 March 2015. 
                   
11. PRO FORMA FINANCIAL EFFECTS ON ACUCAP 
 
Set out below is the summary pro forma financial effects on the net asset value and tangible 
net asset value per Acucap Linked Unit (or, if the Acucap Restructure is approved, per 
Acucap no par value share) after the acquisition by Acucap of all Offer Units.  

The summary pro forma financial effects of Acucap are the responsibility of the directors of 
Acucap and have been prepared for illustrative purposes only, to provide information to 
Acucap Linked Unitholders on how the implementation of the Offer may have impacted on 
the financial position of Acucap as at 30 September 2013. In addition, this information may 
be useful to Sycom Unitholders in providing them with information on the pro forma 
financial position of the Enlarged Acucap (in which they will become invested, should they 
accept the Offer). 

Due to their nature, the summary pro forma financial effects may not fairly present 
Acucap's financial position and/or changes in Acucap Linked Unitholders' capital after 
implementation of the Offer. 

The summary pro forma financial effects have been prepared using accounting policies that 
comply with International Financial Reporting Standards and that are consistent with those 
applied in the audited, published financial statements of Acucap for the year ended 31 
March 2013. 
                                                                            (1)                   (2)          (3)
                                                                   Acucap before          Acucap after 
                                                                                                              Change 
                                                                  implementation       implementation 
                                                                                                                 (%) 
                                                                   of the Offer         of the Offer 
                                                                                                          
Net asset value per Acucap Linked Unit/Acucap no par 
value share (cents)                                                    3 908.47            4 104.80           5.0 
Tangible net asset value per Acucap Linked Unit/Acucap no 
par value share (cents)                                                3 768.48            4 104.80           8.9 
Acucap Linked Units/Acucap no par value share in issue
(‘000)                                                                  175 090             252 319          44.1 
 
Notes and assumptions:
 
    1.   The net asset value and tangible net asset value per Acucap Linked Unit per column (1) have been 
         extracted from the reviewed interim financial information of Acucap as at 30 September 2013. 

    2.   The net asset value and tangible net asset value per Acucap Linked Unit/Acucap no par value share 
         per column (2) have been calculated after adjusting for the following: 

             a.   assuming that 100% of Sycom Unitholders (other than SPFM and Acucap) accept the Offer in 
                  respect of all their Sycom Units; 

             b.   consolidation of the consolidated statement of financial position of Sycom into Acucap, 
                  which is based on the statement of financial position of Sycom, as extracted from the 
                  reviewed interim financial information of Sycom as at 30 September 2013. The reviewed 
                  statement of financial position of Sycom as at 30 September 2013 has been adjusted for 
                  the acquisition by Sycom of, inter alia, the 50% undivided share in the Somerset Mall from 
                  AECI Pension Fund and the subsequent disposal thereof to Hyprop Investments Limited 
                  which were effective on 1 October 2013 and further information pertaining to which are 
                  included in a circular posted to Sycom Unitholders on 14 June 2013; 

             c.   elimination of Acucap's existing investment in Sycom at cost; 

             d.   de-recognition of the intangible asset held by Acucap as a result of Acucap's right to earn 
                  management and administrative fees from Sycom in terms of the Sycom property 
                  management agreement, Sycom asset management agreement and Retail international 
                  property management agreement; 

             e.   de-recognition of the inter-company distribution payable by Sycom to Acucap on Monday, 
                  9 December 2013; 

             f.   payment of estimated transaction costs by Acucap amounting to R11.7 million, of which 
                  R10.8 million is written off against stated capital and the remaining R864 000 expensed; 

             g.   payment of estimated transaction costs by Sycom amounting to R2.3 million, all of which 
                  are expensed; 

             h.   elimination of Sycom Unitholders interest, amounting to R2.4 million, on consolidation by 
                  Acucap; 

             i.   issue of the Offer Consideration at the fair value of R39.25 per Acucap security (calculated 
                  as the share price per Acucap Linked Unit on 17 March 2014 (being the last practicable 
                  date per the Circular), resulting in a R3.031 million adjustment to stated capital; 

             j.   loss on deemed disposal by Acucap of its initial investment in Sycom at fair value; and 

             k.   gain from a bargain purchase arising as a result of the acquisition contemplated by the 
                  Offer amounting to R1.014 million, net of the de-recognition of the intangible asset held by 
                  Acucap as detailed in note 3b above and transaction costs expensed by Acucap and Sycom 
                  amounting to R3.164 million.
 
    3.   The percentage change is measured as the percentage difference between column (1) and 
         column (2). 

12. SALIENT DATES AND TIMES 
                                                                                           2014

Record date to be sent:                                                      Thursday, 20 March 
     (i)       in respect of Acucap Linked Unitholders, the Circular; and 
     (ii)      in respect of Sycom Unitholders, the Offer Document. 
("Record Date") 
Publication of this announcement on SENS                                    Wednesday, 26 March

Posting of:                                                                    Monday, 31 March 
     (i)       the Circular to Acucap Linked Unitholders and 
     (ii)      the Offer Document to Sycom Unitholders. 
  
Offer Opening Date at 9:00 on                                                  Monday, 31 March

Last day to trade in Acucap Linked Units in order to be eligible to 
vote at the                                                                 Wednesday, 16 April 
Acucap General Meetings  
Record date in order to be eligible to participate in and vote at the Acucap   Friday, 25 April 
General Meetings ("Acucap Record Date") 
Acucap General Meetings to be held at 9:00 on                                     Monday, 5 May 

Release of announcement on SENS regarding:                                        Monday, 5 May 
     (i)       whether the condition precedent to the Offer that Acucap 
               Shareholders and Acucap Debenture Holders (as appropriate) 
               approve the acquisition by Acucap of the Offer Units and the 
               issue of Offer Consideration, has been fulfilled; and 
     (ii)      updating Sycom Unitholders as to the status of the Acucap 
               Restructure and the nature of the Offer Consideration (that is, 
               Acucap Linked Units or Acucap no par value shares) 
("Acucap Update Announcement") 
Offer becomes unconditional on                                                   Tuesday, 6 May

Acucap Update Announcement published in the South African press on               Tuesday, 6 May

Last date for Sycom Unitholders to trade in order to be recorded in the           Friday, 9 May
Sycom register on the Offer Closing Date 

Listing and commencement of trading of 133 153 525 Sycom Receipts on the         Monday, 12 May
JSE, under share code SYCR and ISIN number ZAE000189551 at 9:00 (note 3) 
Offer Closing Date at 12:00 on                                                   Friday, 16 May

Sycom Units held by Accepting Sycom Unitholders to be transferred into the       Friday, 16 May
Escrow Account with effect from close of business on 
                                                                                  Monday, 19 May
Holders of dematerialised Sycom Units will have their accounts at their CSDP 
or broker automatically credited with their Sycom Receipts on 
                                                                                  Monday, 19 May
Holders of certificated Sycom Units will have Sycom Receipts credited to an 
electronic register at the transfer secretaries on 
 
Declaration date in respect of the Final Distributions                         Thursday, 5 June

Finalisation date in respect of the Final Distributions                       Thursday, 12 June

Last date to trade in order to be recorded in Acucap's register and/or          Friday, 20 June
Sycom's register (as applicable) on the Final Distributions Record Date  

Last day to trade in Sycom Receipts under the ISIN number ZAE000189551          Friday, 20 June
and share code SYCR at the close of business on 

Listing of the Offer consideration on the JSE at 9:00 on                        Monday, 23 June

Suspension of the Sycom Receipts on the JSE from commencement of trade          Monday, 23 June
on 
The date on which Acucap Linked Unitholders and Sycom Unitholders must          Friday, 27 June
be recorded in the Acucap and Sycom registers (respectively) to receive the 
Final Distributions ("Final Distributions Record Date") at 12:00 on 
The date on which holders of Sycom Receipts must be recorded in the             Friday, 27 June
register of Sycom Receipt holders in order to receive the Offer Consideration 
at 12:00 on 

The date of transfer of the Sycom Units acquired pursuant to the Offer into     Monday, 30 June
the name of Acucap (note 4) 

Pay date in respect of the Final Distributions (note 4)                         Monday, 30 June

Consideration Pay Date (note 4)                                                 Monday, 30 June

Termination of Sycom Receipts and Acucap Linked Units at the                    Monday, 30 June
commencement of business on 

Notes: 
 
1. All times quoted in this announcement are local times in South Africa.   

2. The above dates and times are subject to change. Any material changes will be released on SENS and in 
   the South African press.  

3. The maximum number of Sycom Receipts will be listed and commence trading on Monday, 12 May 2014, 
   calculated assuming that 100% of Sycom Unitholders accept the Offer. 

4. The Consideration Pay Date of 30 June 2014 is dependent on the fulfilment and/or waiver of all conditions 
   precedent to the Offer as set out in paragraph 4.5. In the event that the conditions precedent to the Offer 
   are not fulfilled and/or waived as at this date, the Consideration Pay Date will be extended accordingly. 
   Any such amendment will be announced on SENS and in the South African press. 

 
13. FURTHER DOCUMENTATION  
The Offer Document, which contains full details of the terms of the Offer, together with 
forms of acceptance, transfer and surrender will be posted on or about Monday, 
31 March 2014, to all Sycom Unitholders registered as such on the Record Date. 
 
The Circular, which contains full details of the terms of the proposed acquisition by Acucap 
and the Acucap Restructure, and includes the notices of the General Meetings, forms of 
proxy and forms of surrender will also be posted on or about Monday, 31 March 2014, to all 
Acucap Linked Unitholders registered as such on the Record Date.  

 
The Offer Document and Circular will both also be available for download on the repective 
websites of Acucap (www.acucap.co.za) and Sycom (www.sycom.co.za) with effect from the 
date of posting. 
 
14. WITHDRAWAL OF CAUTIONARY ANNOUNCEMENT 
Following this announcement of the final terms of the Offer, including the unaudited pro 
forma financial effects and salient dates, Acucap Linked Unitholders and Sycom Unitholders 
are no longer required to exercise caution when dealing in their Acucap Linked Units and 
Sycom Units respectively. 
 
Cape Town 
26 March 2014 
 
Corporate Advisor and Sponsor to Acucap and Sycom 
QUESTCO 
 
Legal and tax advisor to Acucap  
DLA CLIFFE DEKKER HOFMEYR 
 
Legal advisor to Sycom and SPFM 
BOWMAN GILFILLAN 
 
Independent reporting accountants to Acucap 
KPMG 
 
Independent Expert on the Offer 
RAND MERCHANT BANK (A DIVISION OF FIRSTRAND BANK LIMITED) 
 
Competition advisor to Acucap and Sycom 
VANI CHETTY 

Date: 27/03/2014 07:07:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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