Marriott deals blow to Hyprop’s SA Retail bid

Posted On Monday, 20 June 2005 02:00 Published by eProp Commercial Property News
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Marriot says more than half of SA Retail unitholders will reject Hyprop’s offer.

Simon PearseMarriot, the fund manager of listed property funds SA Retail Properties and Martprop, has dealt a blow to Hyprop Investments’ takeover bid for SA Retail, saying more than half of SA Retail unitholders will reject Hyprop’s offer.

This surprise development, which would scupper Hyprop’s bid to control 100% of SA Retail, comes just days before Hyprop unitholders vote on whether Hyprop should pursue the takeover bid.

Marriott CEO Simon Pearse said the SA Retail unitholders who had decided to reject Hyprop’s offer had asked not be named at this stage.

He said there were a variety of reasons given for their decision, but the overriding factor related to the "dilution of earnings that an SA Retail unitholder would experience if they accepted the offer".

He said SA Retail unitholders would experience a dilution because distributions to them would be delayed for three months as Hyprop and SA Retail had different year ends.

Pearse said another reason for their decision was they did not want to be part of a "hybrid structure", where another company owns a substantial number of units but does not have 100% control.

Marriott has always said that at least 15% of SA Retail unitholders would not vote in favour of the Hyprop offer.

It has argued that Hyprop will never gain 100% control of SA Retail and that this would be disadvantageous for SA Retail and Hyprop unitholders.

"With more than 50% (of SA Retail unitholders) rejecting the offer, it leaves the Hyprop unitholder in a costly hybrid structure without achieving control of SA Retail," said Pearse.

He said that this brought into question whether Hyprop unitholders, who are due to vote on the Hyprop takeover bid on Wednesday, should support the offer being proposed by their board.

Last modified on Wednesday, 07 May 2014 09:39

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