Major Emira shareholder, I Group, raises its stakes in listed REIT

Geoff Jennett, CEO of Emira Property Fund.
Geoff Jennett, CEO of Emira Property Fund.

Emira Property Fund has received written notice from its major shareholder, the I Group, that the I Group and its concert parties have raised their stakes in the REIT, now holding 35.003% of its voting rights.

These shareholders are now obliged by the Companies Act to make a mandatory offer to acquire all the remaining shares in Emira.

The offeror companies are Maitlantic 10 Proprietary Limited, a wholly owned subsidiary of private South African property owner and developer I Group Consolidated Holdings, and Cayman Island registered hedge fund Clearance Cantara Master Fund Limited.

The offerors confirmed their firm intention to proceed as mandated and to offer a consideration of R9.15 per Emira share in cash, being the highest price that they have paid per Emira share in the last six months, which compares to Emira’s net asset value per share which was R14.75 per share as at the 31st of December 2020.

In line with the appropriate process, an independent board – comprising Emira Directors Gerhard van Zyl, Wayne McCurrie and Vuyisa Nkonyeni – have been appointed to consider the offer, which will be detailed in a circular posted to shareholders by the offerors within twenty business days of Friday, the 23rd of April 2021.

The independent board will appoint an independent expert to advise the Emira Board on the proposed offer and provide a fair and reasonable expert opinion. This opinion will be issued to Emira shareholders in its response circular, which will be posted within a further twenty business days of the offerors’ circular.

Each Emira shareholder will then have to decide whether to sell their shares in terms of the mandatory offer or not to sell their shares. Should all eligible Emira shareholders agree to accept the mandatory offer and sell their shares, they would receive a combined R2,869,232,960. However, two investors together holding around 5% of Emira’s shares have already rejected the offer with irrevocable undertakings provided to the offeror.

Maitlantic and Clearance Capital have provided the required guarantees and have confirmed that they are the ultimate prospective purchasers and are not acting in concert with any other parties.

After opening, the mandatory offer must remain open for acceptance for at least 30 business days, and should it be declared wholly unconditional, at least 10 business days thereafter. The conditions precedent includes approvals from the Takeover Regulation Panel, Competition Authorities, and South African Reserve Bank.