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Proposed acquisition of all Vividend Income Fund Limited (“Vividend”) linked units and renewal of cautionary
ARROWHEAD PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2011/000308/06)
JSE share code: AWA ISIN: ZAE000158101
JSE share code: AWB ISIN: ZAE000158119
(Approved as a REIT by the JSE)
(“Arrowhead”)
PROPOSED ACQUISITION OFALL VIVIDEND INCOME FUND LIMITED (“VIVIDEND”) LINKED UNITS AND
RENEWAL OF CAUTIONARY
1. THE VIVIDEND ACQUISITION
Arrowhead linked unitholders are referred to:
- the SENS announcement dated 5 December 2013 in relation to Arrowhead’s acquisition of 31.7% of the Vividend
linked units in issue from Coronation Fund Managers (the “Coronation acquisition”);
- the SENS announcement dated 24 February 2014, in relation to Arrowhead’s acquisition of the equity in Vividend
Management Group Proprietary Limited (“the Manco acquisition”), the external asset manager of Vividend; and
- the joint Arrowhead and Vividend announcement released on SENS today (the “Firm Intention Announcement”)
relating to Arrowhead’s firm intention to make an offer to acquire all the issued linked units in Vividend (“Vividend
Linked Units”), which it does not already hold (the “Offer”) by means of one or more indivisibly linked schemes of
arrangement in terms of section 114 of the Companies Act 71 of 2008, as amended, or if the conditions to which the
Scheme is subject are not fulfilled, or where applicable waived, (as described more fully below), by means of a
voluntary general offer extended to all Vividend linked unitholders.
The Coronation acquisition, the Manco acquisition and the Offer are collectively referred to in this announcement as the
“Vividend acquisition”. The Vividend acquisition constitutes a category 1 transaction under the JSE Listings Requirements
and, as set out in the Firm Intention Announcement, the Offer is (amongst other conditions) subject to the requisite approval
of Arrowhead linked unitholders. A circular in relation to the Vividend acquisition (including details of the Vividend
acquisition) is being prepared and will be sent to Arrowhead linked unitholders in due course.
2. PROPERTY SPECIFIC INFORMATION
The effective date of the Vividend acquisition is 1 April 2014. Details of the properties in the Vividend portfolio, including
property name and address, geographical location, sector, rentable area, weighted average rental per square meter and the
valuations attributed to the properties, are as follows:
Rentable area
Property name and address Geographical location Sector (m2)
99 Market Street Western Cape Retail 28 952
Montclair Mall KwaZulu-Natal Retail 11 758
Church Street Pietermaritzburg KwaZulu-Natal Retail 5 258
Clearwater Crossing Gauteng Retail 10 092
Rynfield Shopping Centre Gauteng Retail 3 946
Pick ‘n Pay Odendaalsrus Free State Retail 3 682
Beaufort West Shopping Centre Western Cape Retail 6 899
Market Square Centre King Williams’ Town Eastern Cape Retail 13 264
Eersterus Plaza Gauteng Retail 6 950
Vusani House Witbank Mpumalanga Retail 4 632
Rosettenville Junction Gauteng Retail 14 189
Access Park Retail Centre Kenilworth Western Cape Retail 18 764
Sasol Oil, 316 Kent Street, Ferndale Gauteng Office 13 347
158 Jan Smuts, Rosebank Gauteng Office 19 463
Owl Street Milpark Gauteng Office 14 928
SARS Durban KwaZulu-Natal Office 21 936
Tyrwhitt Avenue Rosebank Gauteng Office 1 497
BeyersNaude Blackheath Gauteng Office 3 080
Sasol Gas, 272 Kent Street Ferndale Gauteng Office 2 526
Gradner Street Roggebaai Western Cape Office 4 901
SARS Provence House Mpumalanga Office 5 866
Beka Park Jhb Gauteng Industrial and Office 21 043
Beka Park Durban Kwa-Zulu Natal Industrial and Office 735
Beka Park Bloemfontein Free State Industrial and Office 391
Total 238099
Weighted average rental per square
metre Valuation as at
Property name and address (R/m2) 31 August 2013 (R’000)
99 Market Street 81.67 224 000
Montclair Mall 93.07 115 503
Church Street Pietermaritzburg 73.44 46 000
Clearwater Crossing 89.57 87 600
Rynfield Shopping Centre 88.85 27 700
Pick ‘n Pay Odendaalsrus 61.58 21 240
Beaufort West Shopping Centre 58.85 38 500
Market Square Centre King Williams’ Town 59.67 74 000
Eersterus Plaza 56.58 32 200
Vusani House Witbank 61.28 15 600
Rosettenville Junction 49.29 42 700
Access Park Retail Centre Kenilworth 160.34 493 769
Sasol Oil, 316 Kent Street, Ferndale 115.22 131 000
158 Jan Smuts, Rosebank 89.85 182 800
Owl Street Milpark 92.99 123 200
SARS Durban 72.31 180 529
Tyrwhitt Avenue Rosebank 223.00 33 500
BeyersNaude Blackheath 130.43 44 800
Sasol Gas, 272 Kent Street Ferndale 68.09 29 100
Gradner Street Roggebaai 63.78 41 000
SARS Provence House 88.79 45 000
Beka Park Jhb 62 142 000
Beka Park Durban Nil 1 500
Beka Park Bloemfontein Nil 1 500
Total 84.34 2 174 741
^ Arrowhead is acquiring the equity in Vividend and has not attributed individual valuations to each of the properties in the
Vividend portfolio. The values of the properties as set out above are based on the Vividend directors’ valuations as
extracted from the annual report of Vividend for the year ended 31 August 2013.
3. UNAUDITED PRO FORMAFINANCIAL EFFECTS
The table below sets out the unaudited pro forma financial effects of the Vividend acquisitionbased on Arrowhead’s audited
results for the year ended 30 September 2013. These financial effects are the responsibility of the directors of Arrowhead and
have been prepared for illustrative purposes only, in order to provide information about the results and financial position of
Arrowhead assuming that the Vividend acquisitionhad been implemented on 1 October 2012 for purposes of the statement of
comprehensive income and on 30 September 2013 for purposes of the statement of financial position.
The table below sets out the pro forma financial effects of the Vividend acquisition based on the 12 months results of
Arrowhead to 30 September 2013:
Before1 After2 Change
%
Basic earnings per A linked unit (cents) 145.17 118.03 (18.7)
Basic earnings per B linked unit (cents) 138.02 108.44 (21.4)
Headline earnings per A linked unit (cents) 82.48 77.75 (5.7)
Headline earnings per B linked unit (cents) 75.32 68.17 (9.5)
Distribution per A linked unit (cents) 60.00 60.00 -
Distribution per B linked unit (cents) 53.01 50.42 (4.9)
Net asset value per A and B linked unit 6.06 6.32 6.32
Tangible net asset value per A and B linked unit 6.06 6.17 1.9
Notes and assumptions:
1. The figures set out in the “Before” column above have been extracted, without adjustment, from the reviewed results of
Arrowhead for the year ended 30 September 2013.
2. The financial information in the “After” column has been calculated after taking in to account the following
adjustments:
a. The purchase consideration for the Vividend acquisition is assumed to be R1 476.5 million of which R88.6
million relates to the Manco acquisition.
b. The purchase consideration for the Manco acquisition will be fully funded from interest bearing liabilities at a
cost of 9% per annum.The purchase consideration for the Vividend acquisition excluding the Manco acquisition
will be settled through the issue of 100 356 052 A and B linked units at a combined linked unit price of R13.53
(being the 30 day volume weighted average price immediately prior to and including 28 March 2014).
c. Goodwill of R13.6 million has been recognised.
d. Transaction costs are assumed to be approximately R5 million and are capitalised in full.
3. The unaudited pro forma financial effects have not been reviewed or reported on by Arrowhead’s auditors.
4. RENEWAL OF CAUTIONARY ANNOUNCEMENT
Arrowhead linked unitholders are referred to the unrelated cautionary announcement released on 19 March 2014 and advised
that they should continue to exercise caution when dealing in their Arrowhead linked units until such time as a further
announcement is made.
1 April 2014
Sponsor and Corporate Advisor to Arrowhead
Java Capital
Legal Advisor to Arrowhead
DLA Cliffe Dekker Hofmeyr
Date: 01/04/2014 05:13:00 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.