JSE listed REITs Octodec and Premium announced yesterday that the proposed merger of the companies was approved by the Competition Tribunal. In July this year, the companies secured 100% support from shareholders at the respective general meetings of the companies. Accordingly, all the conditions precedent have now been fulfilled and the merger is effective from 1 September 2014.
Commenting on the merger becoming unconditional, Sharon Wapnick, Chairperson of both Octodec and Premium said: “We are delighted to have received all the necessary approvals to effect this merger which has culminated in us realising a vision set many years ago. I would like to thank the Boards, management team and various advisors for their commitment and support throughout this process.”
The merger will see Premium and IPS become wholly-owned subsidiaries of Octodec and the combined fund will attract a market capitalisation in excess of R5 billion and comprise 325 properties valued at approximately R10 billion.
Going forward, Octodec is expected to attract interest from a wider group of investors, including tracker funds and international investors and it is anticipated that more advantageous funding rates and an improved credit rating will be obtained.
Jeffrey Wapnick, Managing Director of both Octodec and Premium, commented: “We are in a unique position in that all three portfolios are managed by City Property Administration, making this merger a seamless transition. We look forward to realising the benefits of these complimentary portfolios being housed in one entity, and with our strong pipeline, successful track record and experienced management team to continue delivering above average returns for our new and future shareholders.”
Octodec’s strategy is to continue to extract value through yield-enhancing upgrades, redevelopments and acquisition opportunities across the portfolio which offers investors an attractive mix of office, retail, industrial and residential assets largely focussed in the high growth nodes of the Pretoria and Johannesburg CBDs.
The Boards of both Octodec and Premium were supported by the following advisors throughout the merger process: Nedbank Capital acting as Investment Bank, Corporate Advisor and Sponsor; Tugendhaft Wapnick Banchetti and Partners as the Legal Advisors; Deloitte & Touche as the Independent Reporting Accountants and Vani Chetty Competition Law as Competition Law Advisors. The Independent Expert Advisors for the transaction were BDO Corporate Finance for Octodec and RMB Corporate Finance for Premium.