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Acquisition of various properties and cautionary announcement
TEXTON PROPERTY FUND LIMITED
(formerly Vunani Property Investment Fund Limited)
Granted REIT status by the JSE
(Incorporated in the Republic of South Africa)
(Registration number 2005/019302/06)
JSE code: TEX
ISIN: ZAE000190542
(formerly ISIN: ZAE000185872)
(“Texton” or “the Company”)
ACQUISITION OF VARIOUS PROPERTIES AND CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION
Texton is pleased to advise holders of Texton shares (“Shareholders”) that it has entered into
the following Sale of Shares and Claims Agreements (“Agreements”) with:
- the trustees of the Gusi Trust, JA Legh and the trustees of the Nooitgedacht Family Trust
(the “Nooitgedacht Trust”) to acquire the entire issued share capital and claims of Discus
House Proprietary Limited (“Discus House”);
- the trustees of the Nooitgedacht Trust to acquire the entire issued share capital and
claims of Imperial Commercial Properties Proprietary Limited (“Imperial Com Props”);
- the trustees of the Nooitgedacht Trust and JA Legh to acquire the entire issued share
capital and claims of Investage 183 Proprietary Limited (“Investage”); and
- the trustees of the Nooitgedacht Trust, JA Legh, the trustees of the Outeniqua Trust,
Shepherd Tree Investments Proprietary Limited, Tyto Group Investments Proprietary
Limited and Dreamfair Properties 28 Proprietary Limited to acquire the entire issued
share capital of Sable Place Properties 121 Proprietary Limited (“Sable Place”).
(collectively the “Proposed Transactions”)
The Proposed Transactions are consistent with Texton’s strategy to build a quality property
portfolio that offers long-term distribution and capital growth underpinned by strong
underlying cash flows. The Texton board of directors have approved the Proposed Transactions
and details pertaining to the Proposed Transactions are set out in section 2 below. The
transactions are inter-conditional to one another and the Agreements contain warranties
normal for acquisitions of this nature.
2. INFORMATION RELATING TO THE PROPERTIES
The Proposed Transactions involve the acquisition of the entire issued share capital and claims
of Discus House, Imperial Com Props, Investage and Sable Place (“Vendor Companies”). Details
relating to the underlying property assets (collectively the “Properties”) are as follows:
2.1. Discus House
Property description: Remaining Extent of Portion 47 of the Farm Zuurfontein
No 33, Registration Division I.R., Province of Gauteng,
measuring 6.8299 hectares; and
Remaining Extent of Portion 114 (a portion of portion 8)
of the Farm Zuurfontein No 33, Registration Division I.R.,
Province of Gauteng, measuring 4.0720 hectares
Major tenants: Luzupu Trading Proprietary Limited t/a Cambridge Food
Proprietary Limited – 1,470m2 (expiry 30 Nov 2021),
Arlindo Trading Close Corporation T/A Big Save – 954m2
(expiry 30 Jun 2015), Yum Restaurants International
Proprietary Limited – 307m2 (expiry 31 Oct 2017), and
various other smaller tenants.
Location: Gauteng
GLA: 6,019 m2
Purchase price: R71,633,543 (which includes outstanding loans of
R24,678,677). This is to be settled in Texton shares.
Independent valuation: R93,600,000
2.2. Imperial Com Props
Property description: Erf 531 Woodmead Extension 5, City of Johannesburg,
measuring 1.2000 hectares; and
Erf 532 Woodmead Extension 5, City of Johannesburg,
measuring 1.1999 hectares
Major tenants: SA Fumart Close Corporation – 1,258m2 (expiry 31 Jul
2016), Marshall Music Proprietary Limited – 1,165m2
(expiry 30 Nov 2017), JJM Hardware Wholesalers Close
Corporation – 771m2 (expiry 30 Jun 2016), Conschef
Proprietary Limited – 765m2 (expiry 30 Apr 2017), Prozak
Electronic World (JHB) Close Corporation – 752m2 (expiry
30 Jun 2016), Docky's Footwear Close Corporation –
730m2 (expiry 30 Apr 2015), Karmano Investments
Proprietary Limited – 693m2 (expiry 31 Oct 2016) and
various other smaller tenants.
Location: Gauteng
GLA: 13,086 m2
Purchase price: R66,987,397 (which includes outstanding bank loans of
R54,020,007). R30,000,000 is to be settled in cash less
R5,897,449 discharge of liabilities owed by the vendor to
the Imperial Com Props and R36,987,397 settled in
Texton shares.
Independent valuation: R111,250,000
2.3. Investage
Property description: Erf 504 Hermanstad Ext 2, measuring 96,452 square
metres and held by T36969/2013;
Erf 27 Dunkeld, measuring 2,974 square metres and held
by T11969/2011; and
Portion 3 of Erf 8 Wierda Valley, measuring 5,809 square
metres and held by T62756/2011,
and all improvements thereof
Major tenants: Defy Appliances Proprietary Limited – 5,222m2 (expiry 30
Sep 2015), Fair Discounters Proprietary Limited – 3,656m2
(expiry 30 Jun 2015), Metrofile Proprietary Limited –
3,419m2 (expiry 31 Jul 2019), Antalis South Africa
Proprietary Limited – 2,754m2 (expiry 31 Jul 2015), Blue
Strata Trading Proprietary Limited – 1,806m2 (expiry 31
Aug 2018), AVK Valves Southern Africa Proprietary
Limited – 1,510m2 (expiry 31 Dec 2016)
Location: Gauteng
GLA: 46,585 m2
Purchase price: R77,743,807 (which includes outstanding bank loans of
R123,303,490). This will be settled in Texton shares
Independent valuation: R192,750,000
2.4. Sable Place
Property description: Erf 23 Kya Sand, measuring 5,563 square metres and held
by T71777/2010, and all improvements thereof;
Erf 21 Kya Sand, measuring 4,524 square metres and held
by T71778/2010, and all improvements thereof;
Erf 51 Kya Sand, measuring 1,500 square metres and held
by T71778/2010, and all improvements thereof;
Erf 64 Kya Sand, measuring 2,775 square metres and held
by T71778/2010, and all improvements thereof;
Erf 513 Kya Sand Ext 29 measuring 2,088 square metres
and held by T71778/2010, and all improvements thereof;
and
Erf 514 Kya Sand Ext 42, Measuring 2,440 square metres
andheld by T71778/2010, and all improvements thereof
Major tenants: Eggtech Proprietary Limited – 1,012m2 (expiry 30 Sep
2015), Streetwise Professor Proprietary Limited – 925m2
(expiry 30 Nov 2014) and various smaller tenants.
Location: Gauteng
GLA: 12,909 m2
Purchase price: R12,413,773 (which includes outstanding bank loans of
R29,654,820). This will be settled in Texton shares
Independent valuation: R40,200,000
The Properties have been valued by Mr T Behrens, a duly authorised Professional Valuer,
registered without restriction in terms of section 19 of the Property Valuers Professional Act,
2000 (Act 47 of 2000), of Real Insight Proprietary Limited.
3. PURCHASE CONSIDERATION
The aggregate purchase consideration for the Proposed Transactions amount to
R228,878,521, which is comprised of a cash consideration of R30,000,000, the discharge of
liabilities owed by the Nooitgedacht Trust to Imperial Com Props of R5,897,449 and a share
consideration of R198,878,521 to be settled through the allotment and issue of 21,122,370
new shares in the Company at R9.42 (clean price), being a 3.8% discount to the clean spot
price of Texton shares on the date of signature of the Agreements.
The total purchase consideration amounts above include VAT levied at the rate of 0% in terms
of section 11(1)(e) of the VAT Act.
4. EFFECTIVE DATE
The effective date of the Proposed Transactions will be 1 July 2014.
5. CONDITIONS PRECEDENT
The Proposed Transactions are conditional upon, inter alia, the following:
- the approval by the Competition Authorities in terms of the Competition Act;
- the requisite approval of Texton shareholders in general meeting; and
- Texton entering into new property management agreements, in respect of the
Properties, with Kuper-Legh Property Management Proprietary Limited.
6. FINANCIAL EFFECTS AND FORECAST INFORMATION
The financial effects of the Proposed Transactions and the relevant forecast financial
information will be published in due course.
7. CLASSIFICATION OF THE PROPOSED TRANSACTIONS
The Proposed Transactions constitute a category 2 related party transaction, in terms of
paragraph 10.1(b)(ii) of the Listings Requirements:
- MJ van Heerden (by way of the Nooigedacht Trust, of which MJ van Heerden is a trustee)
is disposing of his interest in Discus House, Imperial Com Props, Investage and Sable
Place;
- JA Legh is disposing of his interest in Discus House, Investage and Sable Place;
- Both MJ van Heerden and JA Legh are non-executive directors of the Company.
8. CIRCULAR TO SHAREHOLDERS
A circular prepared in terms of the Listings Requirements of the JSE, containing a notice of
general meeting of shareholders, will be dispatched to shareholders on or about 10 November
2014.
Effortless Corporate Finance Proprietary Limited has been engaged by the Company to prepare
a Fairness Opinion in accordance with the Listings Requirements of the JSE. The Fairness
Opinion will be included in the circular to shareholders.
9. CAUTIONARY ANNOUNCEMENT
The financial effects and weighted average rental per square metre will be disclosed to
Shareholders in due course and therefore Shareholders are advised to exercise caution when
dealing in the Company’s shares until such time as these details have been disclosed.
Dunkeld West
17 October 2014
Investment Bank and Sponsor
Investec Bank Limited
Legal Adviser
Cliffe Dekker Hofmeyr Inc.
Date: 17/10/2014 05:00:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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