Listed loan stock company SA Retail Properties said yesterday that it would appoint an independent financial adviser to consult on an offer made by Hyprop to buy all of its linked units.

SA Retail confirmed it had received notification of Hyprop's offer and was "considering" it.

Hyprop unveiled its hostile takeover bid of SA Retail last week, offering SA Retail linked unitholders one Hyprop unit for every 2,7 SA Retail units at an implied price of R8,07.

The implied price of Hyprop's offer is at a 7,6% premium to SA Retail's average recent trading price of R7,50.

Before Hyprop made its offer, SA Retail and Martprop, both of which are managed by Marriott, announced a deal that would see the two being co-owners of each other's retail properties. The move was seen as defensive because if a third party intended to strip the assets out of SA Retail, Martprop would have a pre- emptive right to the properties.

Hyprop says the transaction is "not in the interests of SA Retail unitholders" and "constitutes frustrating action" in terms of the Securities Regulation Panel on takeovers, as SA Retail's board had reason to believe a takeover bid might be imminent when it announced the proposed deal.

It plans to make a representation to the panel and ask it to rule that the SA Retail and Martprop transaction be voted on by SA Retail unitholders.

But SA Retail has moved to reassure its unitholders that its board fully considered the terms of the transaction with Martprop and "believes it to be in the best interests of SA Retail unitholders".

The company also claims it had no reason to believe an offer was imminent at the time it announced the transaction.

SA Retail said it did not believe the transaction constituted frustrating action.