Approval for the acquisition by Redefine was accordingly given. Mike Flax, CEO of Spearhead Property Holdings, reports that the meeting lasted only 65 minutes. There are now, says Flax, two obstacles to be overcome before the deal is unconditional:  the ratification of the deal by Redefine unit-holders on Friday and the Competitions Board approval. "It appears at this stage that neither of these should present difficulties and the deal can be considered a fait accompli", he said.

While it is sad that the Spearhead name is disappearing from the JSE Securities Exchange, said Flax, Spearhead linked unit holders can be grateful that they have enjoyed a highly profitable seven-year run during which time total distributions of R10-83 per linked unit were paid out to unit-holders.

Furthermore, he said, they are now being offered extremely satisfactory terms as part of the merger deal. Flax reminded unit holders that shortly after Spearhead listed in 1999 the linked units had hit a 'trough' in which values fell as low as R4.50 per unit.   Since then, he said, they had climbed at a compound rate of 35% per annum, and by the time the merger proposals were being finalised had reached a level of R34-50.

The Spearhead deal with Redefine will effectively give Spearhead linked unit holders R36.15 per unit as Redefine had valued their shares at R5.85, some 20% above the market rate at the time the agreement was finalised. In previous interviews Flax has stressed that the merger carries with it advantages for both companies. "Last year Redefine was the top-performing company on the Securities Exchange.   The merger will", he said, "create a powerful property company with assets of R 7 billion, operating income of R620 million and a projected growth in the next two years at over 15% per annum with nearly 2 million shares now being traded each day, Redefine, said Flax, is one of the most liquid property funds on the JSE. 

A particularly important advantage of the merger, he added, is that it has enabled Redefine to make use of the entire 15-strong Spearhead development team, which will now form part of Madison and will be responsible for making Redefine a major developer not only in South Africa but further afield.   In the year ahead, he said, development projects with a value of R700-million will be brought to completion and this level of activity is likely to grow annually from now on. (The 40-strong Spearhead property management team will now become part of Broll Real Estate, Redefine's Property Administrator).

Distributions to Redefine shareholders at the end of the current financial year, said Flax, are projected to be 50.62c per linked unit, 17% up on the distributions of 2005/2006.