Listed property loan stock company Pangbourne Properties on Monday announced formal offers for iFour Properties and Siyathenga Property Fund.

The deals are valued at about R2bn. If they are successful, it will increase Pangbourne’s property portfolio value from about R4bn to R9bn.

The announcement fleshes out Pangbourne’s strategy of collapsing its “octopus” structure, which involves strategic investments in associated listed property companies including iFour, Siyathenga and Monyetla Property Fund.

No announcement has yet been made about Monyetla.

Pangbourne CEO Craig Hutchison said the consolidation of Siyathenga and iFour under Pangbourne would create “cost savings” and other “synergies”.

Hutchison said it would bring all the companies’ debt under one roof and this would maximise funding efficiencies.

He said there was a “drive from investors” who wanted to extract value from the collapse of the “octopus strategy”. The takeover of the two companies would also be earnings enhancing for investors in the future, once the strategy had been completed, he said.

The deals require approval from Siyathenga and iFour unitholders. The deals will be based on a unit swap ratio, where the unitholders of the respective funds will swap their units for units in an enlarged Pangbourne.

In the Siyathenga offer, unitholders will be offered 0,5588 Pangbourne units for every Siyathenga unit.

As far as the iFour transaction is concerned, unitholders will receive 0,7941 Pangbourne units for every iFour unit held.

Pangbourne holds a 41% interest in iFour and a 35% stake in Siyathenga at present.

Pangbourne started to change in September last year when listed property loan stock company Resilient Property Income Fund and its sister company Diversified Property Fund acquired a 13% interest in Pangbourne.

The composition of the Pangbourne board had changed since then, and a strategy to unlock value had been implemented.