Johannesburg – Unit holders of Hyprop Investments [JSE:HYP]
have rejected a mandatory offer to buy out minority stakeholders by Redefine Properties.
On Monday, Redefine said in a press release that the shareholders' rejection of the offer did not come as a major surprise. "The low acceptance was expected as the offer price was below the trading price of Hyprop's units," the group said.
Redefine recently increased its stake in Hyprop from 33.3% to 45.2%.
In terms of this acquisition, Redefine had to make a compulsory offer to the remaining Hyprop unit holders at 5 000 cents per unit.
Hyprop shares are trading at around 5 200c, and reached a high of 5 400c before Redefine's intentions were made clear. The group said the recent offer to shareholders marginally increased its stake in Hyprop to 45.7%.
Redefine CEO Marc Wainer said the company was satisfied with its controlling interest of 45.7%.
"The stake places a control premium to the value of Redefine's holding in Hyprop, enhances our listed securities portfolio, and is sufficient to influence the strategy of Hyprop's portfolio," he said.
Speaking to Fin24.com on the proposed acquisition, Naeem Tilly of Avior Research said last week the offer seemed a little unfair to Hyprop shareholders.
According to Tilly, had Redefine offered a premium of about 15% on the group's current share price to account for the diversification benefits to Redefine's portfolio, the cost benefits and the fact that Redefine will be able to exercise control over Hyprop, the offer would have been more fair.
Hyprop's portfolio includes coveted centres like Hyde Park and the Rosebank Mall in Johannesburg, as well as the Canal Walk in Cape Town.
Last week Hyprop reported an 8.1% increase in distributions growth for the six months to end-June 2010, while revenue and distributable earnings from shopping centres jumped by 19% and 17% respectively.