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REDEFINE PROPERTIES LIMITED - Joint announcement - Firm intention by Redefine to acquire all the shares of Pivotal and withdrawal of cauti

Release Date: 30/08/2016 14:52
Code(s): RDF PIV     PDF:  
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Joint announcement - Firm intention by Redefine to acquire all the shares of Pivotal and withdrawal of cauti

 THE PIVOTAL FUND LIMITED                                
(Incorporated in the Republic of South Africa)            
(Registration number 2005/030215/06)                  
JSE share code: PIV ISIN: ZAE000196440                   
(“Pivotal”)                                 
                                                                             

REDEFINE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/018591/06)
JSE share code: RDF ISIN: ZAE000190252
(Approved as a REIT by the JSE)
(“Redefine”)

JOINT ANNOUNCEMENT OF A FIRM INTENTION BY REDEFINE TO MAKE AN OFFER TO ACQUIRE ALL OF THE ISSUED ORDINARY SHARES OF PIVOTAL BY SCHEME OF
ARRANGEMENT AND WITHDRAWAL OF PIVOTAL CAUTIONARY



1.   Introduction
     1.1.    Further to the cautionary announcements released by Pivotal on SENS on 17 June 2016 and
             4 August 2016, the respective boards of directors of Redefine and Pivotal are pleased to
             announce that they have signed a document (“implementation document”) setting out the
             terms and conditions upon which Redefine offered to acquire all of the Pivotal shares (“scheme
             shares”) from Pivotal shareholders (“scheme participants”) by way of a scheme of
             arrangement in terms of section 114 of the Companies Act, No. 71 of 2008, as amended,
             (“Companies Act”) to be proposed by the board of Pivotal between Pivotal and the scheme
             participants (“scheme”).

     1.2.     Subject to the assumptions set out below, and on the basis detailed below, following
              implementation of the scheme Pivotal shareholders will hold approximately 138.54 Redefine
              shares and 9.38 shares in Echo Polska Properties N.V. (“EPP”) (“EPP shares”) for every 100
              Pivotal shares held prior to implementation of the scheme.

2.   Rationale
     Notwithstanding the delivery to date of above average growth in net asset value, the development
     focused Pivotal business faces a number of challenges in the current economic environment of stagnant
     growth and rising interest rates. Whilst Pivotal’s completed portfolio is expected to continue to perform
     satisfactorily, development activity and returns flowing therefrom will be under pressure in the short to
     medium term. Consequently, net asset value growth will be negatively impacted whilst the current
     economic conditions remain difficult. As an alternative to the current development orientated structure of
     Pivotal, the scheme offers Pivotal shareholders the opportunity to convert to a REIT structure and receive
     Redefine shares and in addition EPP shares from which Pivotal shareholders will benefit due to bi-annual
     income distributions, exposure to hard currency earnings, enhanced liquidity as well as continued
     exposure to Pivotal’s existing portfolio of A-grade properties.

     From a Redefine perspective, the scheme is in line with its strategy to diversify, grow and improve the
     quality of its portfolio and recycle its capital through disposing of non-core assets and replacing them
     with prime assets.

     The acquisition of Pivotal positions Redefine even more competitively in the commercial property sector
     in line with its strategic intent to become the landlord of choice in A-grade office space in sought after
     areas in South Africa. This will be further enhanced by partnering with new co-owners (Abland
     Proprietary Limited (“Abland”)) in existing co-ownership ventures.

3.   Salient terms of the scheme
     3.1.     In terms of the scheme, as indivisible components thereof-
              3.1.1.          Redefine will, on the first business day after the day on which the scheme
                              becomes legally effective, acquire all of the scheme shares in exchange for the
                              allotment and issue of 460 000 000 Redefine shares (“Redefine consideration”),
                              which translates into an assumed swap ratio of 1.38537 Redefine shares per
                              scheme share.
              3.1.2.          Pivotal will declare a distribution (“Pivotal EPP distribution”) to scheme
                              participants in an amount equal to the market value of Pivotal’s 31 153 281 EPP
                              shares as at the close of business on the last business day prior to 5 January 2017.
                              Redefine will discharge the obligation of Pivotal to pay the Pivotal EPP
                              distribution resulting in a claim by the scheme participants against Redefine
                              which claim will be settled by Redefine by the delivery of 31 153 281 EPP
                              shares to the scheme participants (which translates into an assumed 0.09382 EPP
                              shares per scheme share) (“EPP consideration”) on or about 5 January 2017
                              (“EPP transfer date”).

     3.2.     In light of a requirement not to have the EPP shares held by public shareholders and freely
              tradeable in the period immediately after its planned initial public offering and listing of its
              shares on the JSE, the EPP consideration will be retained by Redefine for a period after the day
              on which the scheme becomes legally effective and will be settled by the delivery of the EPP
              consideration to the scheme participants on the EPP transfer date.
     3.3.     The Redefine consideration and the EPP consideration will be settled by the delivery of
              Redefine shares and EPP shares respectively to the scheme participants in accordance with the
              settlement procedures to be set out in the combined circular to Pivotal shareholders (“scheme
              circular”) and in compliance with the Financial Markets Act, 19 of 2012.
     3.4.     If the aggregate number of Redefine shares or EPP shares deliverable to a scheme participant
              yields a decimal result, then the number of EPP shares and/or Redefine shares to be allocated
              will be rounded in accordance with the rounding convention as set out in the Listings
              Requirements of the JSE.
     3.5.     Redefine undertakes not to conduct any capital reductions (including any unbundling of any of
              its assets to its shareholders) or sub-divisions of its securities or declare any dividends or other
              distributions, other than as envisaged in paragraph 5.1, unless Redefine and Pivotal have agreed
              an appropriate amendment to the terms of the scheme in writing.
     3.6.     Pursuant to the terms of the scheme, risk in and benefit to the –
              3.6.1.           scheme shares will, on the business day after the scheme becomes legally
                               effective, pass to Redefine; and
              3.6.2.           Redefine consideration will, on the business day after the scheme becomes
                               legally effective, pass to the scheme participants.
     3.7.     Pursuant to the scheme, Redefine will remain the registered and beneficial owner of the
              31 153 281 EPP shares to be delivered to the scheme participants until the transfer and
              registration of such shares into the names of the scheme participants which will be on or about
              EPP transfer date.


4.   Conditions precedent
     The implementation of the scheme will be subject to the fulfilment (or waiver, as the case may be) of the
     following conditions precedent by no later than 30 November 2016, or such later date as Redefine and
     Pivotal may agree to in writing:
     4.1.     to the extent required, the counterparties under the debt funding agreements with Pivotal have
              provided their written consents to the change of control of Pivotal pursuant to the scheme;
     4.2.     Pivotal has concluded an agreement to dispose of its co-ownership interests to the co-owners of
              the following property developments, namely West End and Lake View Land, which disposal
              shall be conditional on the scheme becoming unconditional;
     4.3.     those parties with a future right or potential right to be issued and/or subscribe for Pivotal shares
              have agreed amended terms with Pivotal, conditional upon the scheme becoming unconditional,
              such that those rights are accelerated, and such parties are issued with the requisite number of
              Pivotal shares, prior to the date on which Pivotal shareholders are required to be reflected in the
              share register of Pivotal in order to receive the scheme consideration;
4.4.    EPP shares have been listed on the main board of the JSE by way of an inward listing, which is
        expected to take place in the middle of September 2016 (“EPP listing date”);
4.5.    Investec Bank Limited, as provider of debt funding to Pivotal and its subsidiaries in respect of
        the EPP shares, has provided such consent as may be required in order to give effect to the
        scheme;
4.6.    Redefine has procured from EPP and the remaining shareholders of EPP immediately prior to
        the inward listing referred to in paragraph 4.4 such written consents and/or waivers of lock-in or
        other rights they may have in respect of the transfer of the EPP shares held by Redefine and/or
        one or more of its subsidiaries, in terms of the scheme as further envisaged in paragraph 3.1.2
        above;
4.7.    Pivotal has agreed terms for the disposal of its interest in Abreal, together with the assumption
        of any associated debt, conditional on the scheme becoming unconditional, to Abland and on
        terms reasonably acceptable to Redefine, and if required, that Abreal has consented to such
        disposal (“Abreal sale”) and that the Abreal sale has become unconditional in accordance with
        its terms, save for the condition requiring that the scheme becomes unconditional;
4.8.    Pivotal has procured the acceleration of all accrued rights, and the consequent cash payment in
        settlement of such accrued rights, conditional upon the scheme becoming unconditional, to
        participants in terms of Pivotal’s Share Appreciation Rights Plan and Conditional Share Plan;
4.9.    Pivotal and Abreal have agreed to the cancellation of the property management agreement
        entered into between Pivotal and Abreal on or about 15 October 2015, subject to and with effect
        from the business day on which the scheme becomes legally effective;
4.10.   Pivotal and Redefine enter into an agreement in terms of which those Abreal employees based
        at Pivotal’s properties and/or who are exclusively dedicated to Pivotal’s properties, will become
        employees of Redefine in terms of section 197 of the Labour Relations Act, 66 of 1995;
4.11.   that certain co-ownership interests in properties identified in the implementation document
        (“Setso assets”) have been sold to Setso Property Fund Proprietary Limited (“Setso”), and that
        all rights, title and interest in and to the Setso assets have passed to Setso, on terms and
        conditions acceptable to Redefine and Pivotal;

4.12.   Pivotal and Setso have entered into a written sale agreement with a third party acceptable to
        Pivotal and Redefine, through one or more transactions, ultimately to dispose of all of its shares
        in Setso, on terms and conditions acceptable to Redefine and Pivotal, and that such agreement
        has been implemented in accordance with its terms;
4.13.   the approval of the ordinary and special resolutions set out in the scheme circular, at the
        meeting of Pivotal shareholders to be convened in connection with the scheme (“the scheme
        meeting”), required to implement the scheme by the requisite majority of Pivotal shareholders
        is obtained;
4.14.   to the extent required under section 115(3) of the Companies Act, approval of the
        implementation of the special resolution, as contemplated in section 115(2) of the Companies
        Act, in terms of which Pivotal shareholders approve the scheme (“scheme resolution”), by the
        court is obtained and, if applicable, Pivotal not having treated the scheme resolution as a nullity
        as contemplated in section 115(5)(b) of the Companies Act;
4.15.   Pivotal shareholders holding more than 5% of all the issued Pivotal shares not having given, in
        terms of section 164(3) of the Companies Act, valid notice of objection to the scheme resolution
        taken at the scheme meeting and those objecting Pivotal shareholders not having voted against
        the scheme resolution in respect of more than 5% of the issued Pivotal shares at the scheme
        meeting;
4.16.   the receipt of the unconditional approval in writing of the competition authority/ies to the
        scheme, or if such approval is conditional, such conditions being acceptable to the parties upon
        whom they are imposed, acting in good faith, but provided that Redefine shall not be bound to
        accept any condition which requires the disposal of immovable property from the property
        portfolio of Pivotal which, fairly valued, has an aggregate gross value of more than R1 000 000
        000, or the disposal of immovable property from the property portfolio of Redefine which,
        fairly valued, has an aggregate gross value of more than R1 000 000 000;
4.17.   Pivotal has complied with all requirements of section 10 of the Listings Requirements of the
        JSE in respect of the transactions contemplated in paragraphs 4.2, 4.3, 4.7 and 4.9 above, to the
        extent applicable;
     4.18.    the receipt of all other regulatory approvals for the scheme, including those of the JSE, the
              South African Reserve Bank and the Takeover Regulation Panel established in terms of section
              196 of the Companies Act ("TRP"), having been obtained; and
     4.19.    the issue of a compliance certificate by the TRP in relation to the scheme in terms of section
              121(b) of the Companies Act.

5.   Distributions
     5.1.    The Redefine consideration will be issued without scheme participants being entitled to
             participate in the normal income distribution by Redefine on the Redefine shares for the six-
             month distribution period ending 31 August 2016 (“Redefine August distribution”).
     5.2.    The scheme shares will be acquired by Redefine on the basis that Pivotal has not declared or
             paid any distributions in respect of the Pivotal shares since the listing of the Pivotal shares on
             the JSE, save for the Pivotal distribution referred to in paragraph 3.1.2 above to be effected in
             terms of the scheme.
     5.3.    The EPP consideration will be transferred to scheme participants cum the right to any
             distribution(s) declared by EPP to the EPP shareholders in respect of the period between the
             EPP listing date and the EPP transfer date. Any distribution so declared will be discharged by
             Redefine to the scheme participants in cash against receipt of such distribution by Redefine
             from EPP. An EPP clean-out distribution, in respect of the period between 1 June 2016 and the
             EPP listing date, will be declared and paid to the shareholders of EPP recorded in EPP’s share
             register prior to the EPP listing date, and that the EPP shares will be transferred to the scheme
             participants ex the right to participate in the EPP clean-out distribution.


6.   Pro forma earnings and net asset value effects for Pivotal shareholders
     6.1.    In terms of Regulation 101(7)(b)(iv) of the Companies Regulations, 2011 (“Companies
             Regulations”), a firm intention announcement must contain, inter alia, the pro forma earnings
             and asset value per offeree regulated company security if the offer consideration consists wholly
             or partly of offeror securities.
     6.2.    The pro forma financial effects of the scheme for Pivotal shareholders set out below are
             provided for illustrative purposes only to provide information about how the scheme may have
             affected the financial performance and financial position of Pivotal, and because of their nature,
             may not fairly represent the financial performance and financial position of Pivotal after the
             scheme.
     6.3.    The table below sets out the pro forma financial effects of the scheme on a Pivotal shareholder
             based on the results of Pivotal for the year ended 29 February 2016, assuming that the scheme
             had been implemented on 1 March 2015 for purposes of the statement of comprehensive income
             and on 29 February 2016 for purposes of the statement of financial position.

              Pivotal shareholder pro forma earnings              Before the        After the
              and net asset value (Rand):                       adjustments1         scheme2        % change
              NAV per share                                            19.78            16.81          (15.0)
              NTAV per share                                           18.14            15.30          (15.7)
              Earnings per share                                        2.67             2.58           (3.5)
              Headline earnings per share                               1.06             1.30            22.8

             Notes and assumptions:
             1.    NAV per share and NTAV per share in the “Before the adjustments” column have been
                   extracted, without adjustment, from Pivotal’s annual financial statements for the year
                   ended 29 February 2016. Earnings per share and headline earnings per share in the
                   “Before the adjustments” column have been extracted, without adjustment, from
                   Pivotal’s annual financial statements for the year ended 29 February 2016.
             2.    The financial information in the "After the scheme" column assumes Redefine acquires
                   all Pivotal shares in issue for a purchase consideration of 460 million Redefine shares.
                   The acquisition is accounted for in terms of IFRS 3: Business Combinations with the
                   resultant difference in consideration paid by Redefine and the Pivotal net asset value of
                   R6.5 billion, being recognised in reserves.
              3.     The NAV and NTAV per share in the "After the Redefine scheme" column assumes that
                     for each Pivotal share will be exchanged for 1.38537 Redefine shares and 0.09382 EPP
                     shares. This disclosure is calculated on the same basis as set out in Pivotal’s annual
                     financial statements for the year ended 29 February 2016 (Redefine discloses NAV and
                     NTAV excluding deferred tax and any non-controlling interest).
              4.     The earnings per share and headline earnings per share assumes that the total
                     comprehensive income attributable to Pivotal for the year ended 29 February 2016 was
                     R1.1 billion.
              5.     The pro forma financial effects "Before the scheme” do not include dividend per share as
                     to date, Pivotal has not declared any dividends to shareholders.

7.   Illustrative financial effects pertaining to the scheme
     7.1.      The table below sets out the illustrative financial effects of the scheme for a Pivotal shareholder,
               based on the market price per Pivotal share before the initial announcement notifying Pivotal
               shareholders of a non-binding expression of interest versus the implied market value a Pivotal
               shareholder will hold post the successful implementation of the scheme.

     7.2.     The illustrative financial effects are not pro forma financial effects and are provided for
              illustrative purposes only. The illustrative financial effects are the responsibility of the directors
              of Redefine and Pivotal, and have not been reviewed or reported on by the independent
              reporting accountants.

              Illustrative financial effects         Before the cautionary        After the cautionary          %
              of the scheme (Rand):                        announcement1               announcement2        change
              Market value per share                                  16.00                       16.96        6.0


              Notes and assumptions:
              1.    Illustrates the closing market price per Pivotal share on 15 June 2016, being the day
                    before the cautionary announcement, containing the non-binding expression of interest,
                    was published by Pivotal on SENS on 17 June 2016.
              2.    Illustrates the implied market value of the combined Redefine and EPP shares a Pivotal
                    shareholder will hold should the scheme be successfully implemented, calculated as
                    follows:
                    - The closing market price of a Redefine share on 29 August 2016, being R11.15,
                    multiplied by the swop ratio of 1.38537; plus
                    - The EPP consideration, being 0.09382 EPP shares multiplied by EUR1.00 (being the
                    initial cost per EPP share), converted at a ZAR:EUR exchange rate of 16.14:1.

8.   Pivotal board undertakings
     Redefine has received undertakings from Pivotal that for the period from 5 August 2016 up to the
     business day after the scheme becomes legally effective:
     8.1.     Pivotal will not treat the scheme resolution as a nullity as contemplated in section 115(5)(b) of
              the Companies Act, unless it is instructed to do so by Redefine in writing within 3 business days
              after Pivotal has advised Redefine that a Pivotal shareholder has required Pivotal to seek court
              approval for the scheme resolution in terms of section 115(3)(a) of the Companies Act;
     8.2.     a board resolution in terms of section 44(2) of the Companies Act, authorising the provision by
              Pivotal of any financial assistance in respect of the scheme for the purpose of, or in connection
              with, the purchase of scheme shares in terms of the scheme, will be passed;
     8.3.     Pivotal will not increase its financial debt and related arrangements nor amend any of the terms
              applicable to such financial debt and related arrangements, save as envisaged in the
              implementation document;
     8.4.     Pivotal will continue to conduct its business in the ordinary course and has not and will not
              incur any liabilities other than expenses or costs in the ordinary course of business, in
              connection with the implementation of the scheme, save as envisaged in the implementation
              document;
     8.5.     Pivotal will not sell or otherwise alienate any part of its business, any of its immovable assets,
              or any shares or ownership interest held by it in any subsidiary nor will it sell or otherwise
              alienate any of its material movable assets (being 10% or more) other than in the ordinary
              course of business and save as envisaged in the implementation document;
     8.6.     Pivotal will not enter into any transaction outside of the ordinary course of business (including
              any transaction to acquire an interest in any property or property owning enterprises) nor will it
              take any action outside the ordinary course of business which would materially affect the value
              of Pivotal and/or its business, as reasonably appraised by Redefine, save as envisaged in the
              implementation document;
     8.7.     Pivotal will not recommend, declare, pay or make or propose to recommend, declare, pay or
              make, any capitalisation issue, capital reduction, dividend or other distribution, whether payable
              in cash or otherwise, save as envisaged in the implementation document;
     8.8.     Pivotal will not issue or agree to issue any further shares or other securities, other than any such
              issues to which it may already be legally committed as envisaged in paragraph 4.3;
     8.9.     Pivotal will not issue or grant options or similar rights of whatsoever nature in respect of
              unissued Pivotal shares or other securities;
     8.10.    Pivotal will not create or permit the creation of any shares or securities carrying rights of
              conversion into, or subscription for, Pivotal shares or other securities save as envisaged in the
              implementation document;
     8.11.    Pivotal will continue to implement the trusts rationalisation process previously agreed to
              between Pivotal and Redefine, and which is currently underway, in accordance with the terms
              agreed between the parties, and within a reasonable timeframe;
     8.12.    Pivotal will not carry out any group re-organisation or capital restructuring, including, without
              being limited to repurchases of Pivotal shares, save as envisaged in the implementation
              document; and
     8.13.    Pivotal will comply with section 126 of the Companies Act.

9.   Non-solicitation
     9.1.    Pivotal has agreed that during the exclusivity period, as set out in the implementation document,
             it will not, directly or indirectly:
             9.1.1.           solicit, initiate or encourage any expression of interest, enquiry, proposal or offer
                              regarding any merger, amalgamation, business combination, takeover bid, sale or
                              other disposition of all or substantially all of the equity in and/or business and/or
                              assets of Pivotal, or afford options to acquire equity, the business and/or assets of
                              Pivotal or enter into any negotiation or consummate any transaction for any type
                              of similar transaction or series of transactions, which would or could constitute
                              or result in any affected transaction (as contemplated in section 117(1)(c) of the
                              Companies Act, save for section 117(1)(c)(iv)) or a change of control (as
                              contemplated in section 123 of the Companies Act) in relation to Pivotal or
                              reasonably be considered to be likely to preclude or frustrate the scheme or its
                              implementation (each an “alternative proposal”); or
             9.1.2.           subject to paragraph 9.2 below, approve or recommend an alternative proposal or
                              enter into any agreement in respect of an alternative proposal.
     9.2.    Should Pivotal receive an unsolicited alternative proposal which the independent directors of
             Pivotal determine in good faith constitutes, or would reasonably be expected to result in, a more
             favourable offer (from a financial perspective or its prospects of success (including conditions
             precedent such as the requirement for approval from the competition authorities) to the Pivotal
             shareholders, Pivotal will promptly notify Redefine of the communication or receipt of the
             alternative proposal, indicating the identity of the person making such alternative proposal and
             the material terms and conditions thereof. Redefine will be afforded a period of not less than 10
             business days after receipt of a more favourable alternative proposal to issue an offer on terms
             which are at least as favourable (from a financial perspective or its prospects of success
             (including conditions precedent such as the requirement for approval from the competition
             authorities) as the terms of the alternative proposal, during which period Pivotal will not
             participate in any discussions or negotiations regarding the alternative proposal or communicate
             the alternative proposal to Pivotal shareholders or the public. If Redefine does not exercise its
             rights envisaged in this paragraph 9.2 within the 10 business day period herein, then Pivotal
               will, in relation to such unsolicited alternative proposal only, be released from the undertaking
               and accordingly be entitled to pursue such unsolicited alternative proposal.

10.   Independent expert
      Pivotal has convened a sub-committee of the Pivotal board of directors, comprised of its independent
      non-executive directors being Chris Ewing, Tom Wixley and Tony Dixon (“independent board”), to
      consider the terms of the scheme. The independent board has appointed Questco Proprietary Limited, an
      independent expert acceptable to the TRP (as required in terms of section 114(2) of the Companies Act,
      read together with regulations 90(1) and 110 of the Companies Regulations) (the “independent expert”),
      to advise and report to the independent board on the scheme by way of a fair and reasonable opinion in
      compliance with section 114(3) of the Companies Act. The independent expert’s full report as well as the
      independent board’s opinion of the scheme, the Redefine consideration and the EPP consideration will be
      included in the scheme circular to be issued to Pivotal shareholders in respect of the scheme.

11.   Confirmation to the TRP
      In accordance with the Companies Regulations, Redefine has confirmed with the TRP that it has
      sufficient authorised but unissued shares in order to satisfy the Redefine consideration and that Redefine
      will have sufficient EPP shares in order to satisfy the EPP consideration.

12.   Shareholding of Redefine in Pivotal
      12.1.  Marc Wainer, a director of Redefine, owns 50% in Ellwain Investments Proprietary Limited
             (“Ellwain”). Ellwain owns 2 678 160 (0.81%) shares in Pivotal.

      12.2.    Save for paragraph 12.1 above, Redefine does not hold or control (directly or indirectly) any
               Pivotal shares and does not have any arrangement (whether by way of option or otherwise) to
               acquire Pivotal shares, other than pursuant to the scheme.

13.   Pivotal shareholder support
      Irrevocable undertakings to vote in favour of the scheme have been received from the following Pivotal
      shareholders holding in aggregate 83 953 332 Pivotal shares, representing 25.2% of the voting power if
      all scheme shares are voted at the scheme meeting.
                                                                         Number of                Percentage of
                                                                             shares                     shares
      Name of shareholder                                                      held                       held
      Abland Proprietary Limited                                         41 650 971                      12.5%
      MMI Group Limited                                                  42 302 361                      12.7%
      Total                                                              83 953 332                     25.2%

14.   No concert party arrangements
      Redefine confirms that it is the ultimate purchaser of the scheme shares and is not acting in concert with
      any other party in relation to the scheme.

15.   Termination of the Pivotal listing
      The scheme will constitute Pivotal as a wholly-owned subsidiary of Redefine and necessitate Pivotal’s
      delisting from the JSE Limited.

16.   Documentation and timing in regard to the scheme
      It is anticipated that the scheme circular will be posted to Pivotal shareholders on or about
      17 October 2016. The scheme circular will include, among other things, the notice of the meeting to be
      held on or about 15 November 2016 for the purpose of considering and, if deemed fit, passing the
      resolutions required to implement the scheme. A further announcement setting out the salient dates and
      times in relation to the scheme, the scheme circular and the meeting will be released in due course.

17.   Categorisation of the scheme for Redefine
      The scheme constitutes a category 2 acquisition for Redefine in terms of the JSE Listings Requirements.
      Accordingly, the scheme is not subject to approval by Redefine shareholders.
18.   Property specific information
      18.1.   Set out below is the name, location, gross rental area (“GRA”), weighted average gross rental
              and valuation as at 29 February 2016 of the income producing properties of Pivotal:

                                                                                               Valuation as
                                                                                 Weighted                at
                                                                                  average      29 February
                                                                        GRA         gross             2016
                      Property name           Location                   (m2)     rent/m2           (R’000)
                      Retail
               1.     Gateway Centre          Rooihuiskraal
                                              Extension 46,
                                              Centurion, Gauteng       11 160           77          121 200
               2.     Greenstone Motor        Greenstone Hill,
                      City                    Johannesburg,
                                              Gauteng                   5 998           90           62 800
               3.     Hazeldean Square        Silver Lakes,
                                              Pretoria, Gauteng        18 682          123          304 300
               4      Hillcrest Boulevard     Hillcrest, Pretoria,
                      Shopping Centre         Gauteng                   8 451          173          231 600
               5.     Centurion Lifestyle     Centurion, Pretoria,
                      Centre                  Gauteng                  54 772          107          833 100
               6.     Cradlestone Mall        Krugersdorp,
                      (40%)                   Gauteng                  31 149          145          632 600
               7.     Goldfields Mall         Welkom, Free State        3 953          125          718 800
               8.     Wonderboom              Wonderboom,
                      Junction                Pretoria, Gauteng        37 690          135          680 000
                      Office
               9.     Alice Lane Phase - 1    Sandton, Gauteng
                      and 2                                            34 171          185        1 295 400
               10.    Ballyoaks Office Park   Bryanston, Gauteng       23 410          123          497 900
               11.    Bryanston Place         Bryanston, Gauteng
                      Office Park                                       8 817          131          177 100
               12.    Fairway Office Park     Bryanston, Gauteng        6 336          102          115 100
               13.    Hillcrest Corner        Hillcrest, Pretoria,
                                              Gauteng                   1 945          177           48 300
               14.    Hillcrest Office Park   Hillcrest Pretoria,
                                              Gauteng                  19 259          150          492 400
               15.    Lakeview Office Park    Constantia Kloof,
                      (66.67%)                Gauteng                  14 184          127          363 400
               16.    Riverside Office Park   Centurion, Gauteng       24 006          183          582 800
               17.    Stoneridge Office       Greenstone, Gauteng
                      Park
                      Building A – E                                   16 407           88          341 600
               18.    Bree Street             Cape Town                 8 841          170          276 600
                      Light Industrial
               19.    Elvey                   Greenstone Hill,
                                              Modderfontein,
                                              Gauteng                   4 127           56           34 800
               20.    Hirt & Carter           Greenstone Hill,
                                              Modderfontein,
                                              Gauteng                   6 083           63           66 200
               21.    Rage                    Greenstone Hill,
                                              Modderfontein,
                                              Gauteng                   9 000           50           69 500

      18.2.   Set out below is the name, GRA, expected development completion date, valuation as at
              29 February 2016 and valuation on completion of Pivotal’s development properties:
                                                                                    Valuation as
                                                                       Expected               at       Valuation
                                                                    development     29 February                on
                                                        GRA          completion            2016       completion
                        Development name                 (m2)              date          (R’000)          (R’000)
                1.      Alice Lane Phase 3             35 000          Apr 2017         920 000         1 326 600
                2.      Loftus Park – Phase 1
                        (50.0%)                        12 347           Nov-17            24 230             362 181
                3.      Hill on Empire -Building
                        A (50.0%)                       7 411            Apr-17           34 394             163 534
                4.      Kyalami Corner - Phase 1
                        (80.0%)                        22 331            Apr-17           37 186             457 853

      18.3.    Set out below is the name, bulk and valuation as at 29 February 2016 of the vacant land held by
               Pivotal:

                                                                                                   Market value as
                                                                                          Bulk      at 29 February
                        Name                                                               (m2)       2016 (R’000)
                1.      Waterfall Ridge (37.0%)                                          16 313             30 363
                2.      Kyalami Corner (80.0%)                                           30 946             61 891
                3.      Centurion Lifestyle Centre                                       16 748             50 244
                4.      Loftus Park – Phase 2 land (50.0%)                               10 886             27 214
                5.      S&J – (45.0%)                                                   365 020            326 250
                6.      Hill on Empire (50.0%)                                            9 851             17 238
                7.      Galleria – Rosebank (20.0%)                                      16 000            100 000
                8.      Centurion Junction (25.0%)                                        7 127             14 253
                9.      Atlantic Hills – Cape Town (55.0%)                              122 159            172 700
                10.     Wonderboom Junction Phase 2                                      36 118             61 000

               Notes
               1. As the properties are being acquired by Redefine through its acquisition of 100% of the
                   issued shares in Pivotal, no purchase price per property has been ascribed.
               2. The effective date of the valuations was 29 February 2016.
               3   The properties were valued by:
                   3.1. Jurgen Kark Head of Valuations, BSc Real Estate, Senior Valuer (5512), on behalf
                          of Jones Lang LaSelle (Pty) Ltd;
                   3.2. Kim Pfaff, BSc (Hons) MRICS, Chartered Valuation Surveyor (1240685),
                          Professional Valuer (6497), on behalf of Jones Lang LaSalle (Pty) Ltd; and
                   3.3    Roger Hunting MRICS, Dip TP, MIV(SA) Chartered Valuation Surveyor,
                          Registered Professional Valuer (No. 115/1) on behalf of Broll Valuation and
                          Advisory Services (Pty) Ltd, the Network Affiliate of CBRE Global.

19.   Pivotal’s interest in offshore entities
      Set out below are Pivotal’s interests in offshore entities.

       Investments in associates         % holding         Valuation

       Mara Delta Property
       Holdings Limited                       13.1%      $22 946 311     Market value as at 26 August 2016

       Oando Wings Development
       Limited                                37.1%      $69 178 543     Fair value as at 29 February 2016

       Echo Polska Properties N.V.             6.1%      €31 153 281     Acquisition cost of EUR1.00 per share
20.   Responsibility statements
      20.1.  The independent board accepts responsibility for the information contained in this
             announcement to the extent that it relates to Pivotal. To the best of its knowledge and belief, the
             information contained in this announcement is true and nothing has been omitted that is likely
             to affect the import of the information.
      20.2.  The Redefine board accepts responsibility for the information contained in this announcement
             to the extent that it relates to Redefine. To the best of its knowledge and belief, the information
             contained in this announcement is true and nothing has been omitted that is likely to affect the
             import of the information.

21.   Withdrawal of cautionary
      Following the release of this announcement, Pivotal shareholders are advised that caution is no longer
      required when dealing in Pivotal’s shares.

30 August 2016



Corporate advisor and sponsor to Redefine and Pivotal
Java Capital


Legal advisor to Redefine
Cliffe Dekker Hofmeyr



Legal advisor to Pivotal
ens Africa



Independent reporting accountants
Grant Thornton


Independent expert
Questco 

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