Arrowhead makes firm intention to acquire Vividend Income Fund

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Arrowhead Properties CEO, Gerald Leissner says we are pleased that the Vividend transaction has had the support of the Vividend management and board. Arrowhead Properties CEO, Gerald Leissner says we are pleased that the Vividend transaction has had the support of the Vividend management and board.

JSE-listed property group, Arrowhead Properties, today announced its firm intention to acquire all the issued units in Vividend Income Fund that it does not already own.

The transaction also confirms and supports that the JSE listed property sector is undergoing a significant level of consolidation.

In December‚ Arrowhead bought 31.7% of Vividend Income Fund’s linked units from Coronation Fund Managers‚ in a deal valued at about R430m. Chief operating officer at Arrowhead‚ Mark Kaplan‚ said on Tuesday that Arrowhead had taken the next step and put forward a scheme of arrangement to acquire the remaining units.

In a firm intention announcement on the JSE’s SENS today, unitholders were informed of the terms of the scheme of arrangement and, if the scheme is passed, Arrowhead proposes to acquire all the issued linked units in Vividend for a consideration of not less than 0.374 Arrowhead A and 0.374 Arrowhead B units for every Vividend unit.

Stanlib, which controls about 60.2 million Vividend units (representing about 22% of Vividend’s issued units), has irrevocably undertaken to vote in favour of all resolutions necessary to approve the scheme.

The consideration offered in terms of the general offer, if it is made, will be the same as that offered under the Scheme.

If supported by Vividend unitholders, this transaction will increase Arrowhead’s market capitalisation to around R5,5 billion and its portfolio to around R6 billion.

Gerald Leissner, Arrowhead CEO, says, “We are pleased that the Vividend transaction has had the support of the Vividend management and board. The transaction is expected to create certainty and unlock significant value for Vividend shareholders by providing them with access to a larger more liquid fund with faster growing distributions.”

Vividend’s retail properties include Beaufort West Shopping Centre‚ Rosettenville Junction‚ Westgate Mall and Clearwater Crossing.

Last month, Arrowhead announced that it had bought 34,5 million Dipula Income Fund B linked units from Investec Asset Management.

The deal represent 22% of Dipula’s B linked units acquired and Arrowhead is to become a 11% shareholder in Dipula.

Not only are small property funds consolidating but bigger funds are gobbling up small ones with prime assets. With prime property hard to come by, listed property funds are under pressure to seek new assets to grow their portfolios, which will make it tough for new listings.


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