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Acquisition of Evagold Centre
TOWER PROPERTY FUND LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 2012/066457/06)
JSE share code: TWR ISIN: ZAE000179040
(Approved as a REIT by the JSE)
(“Tower” or the “company”)
ACQUISITION OF EVAGOLD CENTRE
Introduction and rationale
Shareholders are advised that Tower has concluded an agreement (the “purchase agreement”) for the acquisition of
the property letting enterprise conducted in respect of the Evagold Centre (the “property” or “Evagold”), situated at
the corner of the Golden Highway and Tiro Street, Evaton West (the “acquisition”) from Great Lion Acquisitions
Proprietary Limited (the “seller”) for an aggregate purchase consideration of R110 585 000 (exclusive of VAT at zero
percent).
The Evagold Centre is a lower income convenience retail centre with strong trading densities. The acquisition
increases Tower’s retail portfolio from 39% to 42% of its entire property portfolio, calculated with reference to value,
in line with Tower’s longer-term objective to increase its retail exposure to 50% of its portfolio.
Terms of the acquisition
Tower will acquire the property letting enterprise, which includes the property, with effect from the date of
registration of transfer of the property into Tower’s name (the “transfer date”). The purchase consideration for the
property letting enterprise will be payable on the transfer date as follows:
- R55 292 500 will be payable by the allotment and issue of Tower shares at an issue price equal to the greater of
R9.26 (being the net asset value (“NAV”) of Tower as at 30 November 2014) and the last available volume
weighted average traded price per Tower share for the 30 day period immediately preceding the transfer date,
subject to a maximum issue price of R9.50 (the “consideration shares”). Assuming an issue price of NAV per
Tower share, 5 971 112 consideration shares will be issued to the seller; and
- the balance of R55 292 500 will be payable in cash.
The acquisition is not subject to the fulfilment of any conditions precedent.
The seller is in the process of negotiating the conclusion of a lease agreement with BP Southern Africa Proprietary
Limited (“BP”) in terms of which BP will be entitled to erect a petrol filling station, at its expense, on a portion of the
property (the “BP lease”). If the BP lease is concluded and becomes unconditional before 31 December 2015 and BP
pays the initial rental and deposit, the purchase consideration payable by Tower for the acquisition will be increased
by an amount equal to the initial rental payable by BP in terms of the BP lease, calculated on an annual basis,
multiplied by the initial agreed upon yield of 9.5%. The purchase consideration payable by Tower for the acquisition
will increased by a maximum of R6 947 368.
The seller has provided Tower with a rental guarantee, indemnifying Tower against any shortfall in actual rental
income (including guarantee amounts in respect of tenant installations and commissions, plus VAT) in respect of
identified recently improved portions of the property for a period of 6 months from the first day of the month after the
transfer date (the “rental guarantee”).
The consideration shares will be issued prior to the record date for participation in Tower’s final distribution for the
six months ended 31 May 2015. However, the consideration shares should only be entitled to receive the distribution
in respect of the period from the transfer date. The seller will accordingly pay to Tower an amount based on the
distribution in respect of the period from 1 December 2014 to the transfer date (the “distribution payment”).
The seller will provide to Tower security (either in the form of a bank guarantee or a pledge and cession of certain of
the consideration shares) in respect of its obligations under the purchase agreement, including in respect of the rental
guarantee and the distribution payment.
The purchase agreement includes undertakings, warranties and indemnities which are normal for an acquisition of this
nature.
Property specific information
The property specific information required in terms of the JSE Listings Requirements in relation to the property, is set
out below.
Property name and address Evagold Centre, corner Golden Highway and Tiro Street, Evaton West
Sector Retail
Geographical location Gauteng
Rentable Area (m2) 12 542
Weighted Average rental per m2 R85.97
Value attributed to the property R110 585 000
Net operating income (March 2015 to R10 505 665 (excluding the BP lease)
February 2016)
No independent valuation has been carried out and the board of directors of Tower is of the view that the value
attributed to the property above represents the value of the property acquired.
The value of the net assets of the property letting enterprise (including the property) acquired by Tower in terms of the
acquisition is R110 585 000
Categorisation of the acquisition
As announced on SENS on 19 December 2014, Tower had concluded agreements for the acquisition of the entire
issued share capital of and claims against each of:
- Cross Atlantic Properties 162 Proprietary Limited, which owns Shoprite Brits, from Milton Weinberg, the
Jonathan Levitt Family Trust, Lara Weinberg, Saul Sackstein and Daniel Sackstein, for an aggregate purchase
consideration of R48 815 627 (the “Brits acquisition”);
- Lexshell 492 Investments Proprietary Limited, which owns Shoprite Ennerdale, from Milton Weinberg, the
Jonathan Levitt Family Trust, Jon Chaitowitz and The BJB Share 3 Trust, for an aggregate purchase
consideration of R38 036 711 (the “Ennerdale acquisition”); and
- Plenty Properties 118 Proprietary Limited, which owns Shoprite Modimolle, from Milton Weinberg, the
Jonathan Levitt Family Trust, Lara Weinberg, Saul Sackstein and Daniel Sackstein, for an aggregate purchase
consideration of R40 656 515 (the “Modimolle acquisition”),
Milton Weinberg, one of the sellers in each of the Brits acquisition, the Ennerdale acquisition and the Modimolle
acquisition, is an associate of the seller. Accordingly, as each of the acquisition, the Brits acquisition, the Ennerdale
acquisition and the Modimolle acquisition (collectively the “acquisitions”) have been entered into by Tower with the
same party and its associates, the acquisitions have been aggregated for the purposes of determining the categorisation
of the acquisitions, in compliance with the JSE Listings Requirements. The acquisitions are classified as a Category 2
transaction in terms of the JSE Listings Requirements. Accordingly they are not subject to approval by Tower
shareholders.
22 April 2015
Sponsor Legal advisor
Java Capital Cliffe Dekker Hofmeyr
Date: 22/04/2015 03:57:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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