Delta backs off, Rebosis absorbs stake in Ascension

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Rebosis Property Fund headed by Sisa Ngebulana (right) agreed to acquire Delta Property Fund’s entire holding of linked units in Ascension Properties Limited. Rebosis Property Fund headed by Sisa Ngebulana (right) agreed to acquire Delta Property Fund’s entire holding of linked units in Ascension Properties Limited.

Black empowerment property group, Rebosis Property Fund on Tuesday agreed that it would acquire Delta Property Fund’s entire holding of linked units in Ascension Properties Limited.

Earlier this year in February both Delta and Rebosis tried to buy Ascension Properties‚ another BBBEE fund.

At one point Ascension had made deals to be bought out twice‚ effectively one by each of the companies. To avoid the complicated mess that would follow‚ a triple merger was proposed.

A due diligence investigations into a proposed tripartite merger between real estate investment trusts (REITs), Delta and Rebosis have decided that the merger was not “currently opportune”.

Following the decision not to merge, Rebosis did, however, state that it would continue to consider whether or not to make any general offer to Ascension or its linked unitholders, and in the event that an offer was made, Delta had resolved to support Rebosis in any transaction relating to Ascension.

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 proposed merger had been expected to bring value of the combined entity’s property portfolio and market capitalisation to more than R17-billion and R9.5-billion respectively, and was also expected to fast-track the growth aspirations of each of the parties.

Yesterday, Delta announced it had sold all of its Ascension shares to Rebosis and the transaction constitutes of 28-million Ascension A linked units and 82-million Ascension B linked units, for a price payable in cash of R4,76 per A unit and R2,61 per B unit.

Rebosis Chief Executive, Sisa Ngebulana commented: “We are pleased to announce this transaction which showcases the depth of character of both the Rebosis and Delta teams in finding a solution that is in the best interest of shareholders."

“The additional holding significantly increases our strategic stake in Ascension and follows our acquisition of Ascension’s management company in January this year," he said.

The proposed merger had been expected to bring value of the combined entity’s property portfolio and market capitalisation to more than R16.5-billion and R9.5-billion respectively, and was also expected to fast-track the growth aspirations of each of the parties.

This was a sign that the funds had made an amicable joint decision‚ according to Stanlib fund manager‚ Keillen Ndlovu.

Going forward Rebosis intends to continue to act on yield enhancing, strategic consolidation and other pipeline opportunities, building on its strong fundamentals and careful management to grow its distributions and long term capital appreciation for shareholders.

According to Sandile Nomvete, CEO of Delta, the company 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.


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