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ApexHi hopes stake will pave way for takeover

Posted On Thursday, 13 November 2008 02:00 Published by eProp Commercial Property News
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In it's first major acquisition in 15 months, listed property loan stock company ApexHi Properties has bought a 34,85% interest in Ambit Properties for R597,9m.

Gerald LeissnerThe acquisition is the first step in what ApexHi hopes will be a takeover of the smaller Ambit, which has a property portfolio valued at R2,2bn and a market capitalisation of about R1,8bn.

ApexHi is the second-largest property company listed on the JSE with a market capitalisation of R9,5bn and property assets valued at R10bn.

CEO Gerald Leissner said yesterday ApexHi had “looked” at Ambit some time ago because its property portfolio was similar to ApexHi’s profile. He said Ambit had a “nice property portfolio” and that when the opportunity came to acquire a major interest in Ambit, ApexHi was interested in making the acquisition. “We would like to acquire 100% if possible.”

But for ApexHi to make a successful bid for Ambit, it would have to negotiate with other large unitholders such as Absa, which held a 34% interest.

“We are going to speak to the other major unitholders with the objective of increasing our stake in Ambit,” said Leissner.

Although ApexHi had not made a big acquisition in 15 months, it had sold properties to the value of R1bn. “We will buy assets only if they are revenue enhancing. Either, if we are going to borrow (to make acquisitions), the returns on the properties have to be higher than the cost of borrowing or, if we are going to use units, the returns on the property have to be higher,” said Leissner.

ApexHi is using debt to fund the transaction.

Keillen Ndlovu, co-head of Stanlib Property Franchise, said the acquisition did not come as a “big surprise” because the market had seen many listed property companies making enquiries about Ambit with a view to buying an interest in the company.

Apart from Absa and ApexHi, listed property loan stock company Redefine Income Fund holds just under 10% of Ambit. Ndlovu said the three represented about 80% of the total units in Ambit.

He said it “becomes difficult to keep Ambit listed” as it did not have much liquidity.

Last modified on Friday, 18 April 2014 19:06

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