But Resilient CEO Des de Beer said the Resilient stable of listed property funds, which included Resilient, Diversified and Capital Property Fund, did not intend making an offer for Pangbourne .
He said Resilient and Diversified “saw value in the Pangbourne portfolio” and wanted to supplement Pangbourne with “heavyweight property skills”.
To this end Resilient and Diversified had requisitioned Pangbourne to convene a meeting of Pangbourne unitholders “for the purposes of voting for changes to the board”.
“We want to retain the skills of the (Pangbourne) executive management team but supplement it with heavyweight property skills,” said De Beer.
The Resilient stable of property funds has a combined market capitalisation of R8,5bn.
Resilient announced yesterday it had acquired 18,4-million Pangbourne linked units for R300m, while Diversified said it had acquired 7,8-million linked units for R126,4m.
Of the total acquisition of linked units worth R426,4m, De Beer said linked units worth R100m had been acquired from Old Mutual. The remainder were acquired on the open market.
“The rationale is that although Pangbourne has performed poorly in the past, we see value in the Pangbourne portfolio, similar to what was the case with Capital Property Fund,” said De Beer.
In 2004, Resilient acquired units in Capital Property Fund worth R250m at R2,30 for each unit. “Capital is now trading at R5,90 with bright prospects. We see Pangbourne in a similar light,” he said.
De Beer said the purpose of calling a meeting of Pangbourne unitholders was to “rejuvenate” the Pangbourne board. “We think Pangbourne’s prospects are excellent provided the right skills are applied to their property portfolio.”
But Pangbourne’s Hutchison said the company had received “no correspondence from the Resilient stable in this regard except for the notice of a general meeting to remove nonexecutive directors from the board. We see this as a hostile attempt to take over the company by stealth and we don’t believe this is in the best interests of unitholders in Pangbourne.”
Hutchison said Pangbourne was a “very different animal” to Capital Property Fund because of its “diverse holdings and business lines. The current management is unlocking value for unitholders. We’ve done a lot of work to keep increasing distributions, as well as improving the quality of the portfolio and the benefits for that will be seen in the coming years by unitholders.” The Pangbourne unitholders’ meeting would be held near the end of next month.
Andre Stadler, MD of Catalyst Fund Managers, said the initial move appeared to be exploratory. “If they are able to make changes at board level and improve their insight into the company, that would determine their next steps, whether to increase that stake or back out,” said Stadler.
This effectively gave Resilient and Diversified access to a significant portfolio of assets and funds which were rated significantly below the Resilient stable, “which could provide an opportunity to unlock value”.