Delta ceases battle with Rebosis on Ascension

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Delta Property Fund CEO Sandile Nomvete (left), ceases battle with Rebosis Property Fund CEO Sisa Ngebulana (right) on Ascension Properties co-founder Shaun Rai (center). Delta Property Fund CEO Sandile Nomvete (left), ceases battle with Rebosis Property Fund CEO Sisa Ngebulana (right) on Ascension Properties co-founder Shaun Rai (center).

In pursuit to seize African opportunities, Delta Property Fund, a substantially black-owned REIT company, on Tuesday said it had withdrawn its bid and sold its entire holding of Ascension Properties Limited linked units to Rebosis Property Fund.

The potential merger between black-managed Delta, Rebosis and Ascension has collapsed after the parties agreed that a tripartite merger was not “opportune”.

The companies in February announced that they were considering a merger as capital available to smaller market capitalisation REITs was increasingly constrained, driving consolidation and corporate activity to best serve the interests of the REITs’ linked unitholders and tenants.

The decision not to merge did not surprise analysts. Instead they were pleased that cancellation appeared amicable.

“It was always the understanding that the merger made strategic sense‚ but presented practical challenges which seems to have been unable to overcome. It is good that an amicable solution could be reached‚” Anton de Goede of Coronation Fund Managers said.

The value of the Rebosis portfolio is R6.6 billion. Delta owns assets valued at R7 billion while Ascension’s portfolio of mostly government-tenanted offices is valued at about R4 billion.

“The pragmatic conclusion of the Ascension transaction is in the interest of all stakeholders. Although the rationale for the merger was never in question, a number of individual opportunities presented themselves which made us decide that it was in the best interest of all stakeholders to shelve negotiations,” Delta CEO Sandile Nomvete commented.

In terms of the cooperation agreement, Delta has sold its entire holding of linked units issued by Ascension (being 28-million Ascension A linked units (AIA) and 82-million B linked units (AIB)) for a cash consideration of R4.76 per AIA unit and R2.61 per AIB unit, being the 30 day volume weighted average price per unit taken prior to signature of the Sale Agreement.

“We concluded our due diligences on the assets of Ascension and Rebosis and were happy with the outcome, however we believe that the cash received in terms of the transaction announced today can be better deployed to create shareholder value.” explains Sandile Nomvete, CEO of Delta

“We will continue to focus the team’s energy on our strategy of holding a significant presence in government nodes,” adds Bronwyn Corbett, Delta’s CFO and COO.

Going foward, Delta will be pursuing to seize opportunities in Africa. It recently announced plans to establish a new sub-Saharan Africa Real Estate Fund on the JSE in June, named Delta International.

According to Nomvete, the launch of Delta International is indicative of the skill set and experience in the Group. “We are very excited about the launch of the new find, which will be the first outright Africa property listing on the JSE offering a dollar denominated rand hedge.”

Read more on:

Listed Property / REITs  |  Rebosis Property Fund  |  Ascension Properties Limited  |  Mergers and Acquisitions  |  Delta Property Fund  |  Sisa Ngebulana  |  Sandile Nomvete  |  Shaun Rai  |  Delta Africa Property Fund