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The Hyprop/Attfund acquisition is the biggest, juiciest deal South Africa’s listed property sector has ever seen and will combine shopping centre jewels such as Canal Walk and Clearwater Mall into one R17,9bn crown. A deal of this size in an industry with a “small town feel” to it means – once the numbers have been crunched – boardrooms will be filled with dominating and entrepreneurial personalities, each vying for his own best possible outcome.
Finweek looks at the players behind the deal to find out who’s pulling the strings and how that will impact on Hyprop’s bid to get growth back to its bottom line.
Team Hyprop:
Marc Wainer: The puppet master
Wainer is the de facto mover and shaker behind the Hyprop Investments [JSE:HYP] deal. As non-executive director of Hyprop and CEO of Redefine Properties – which holds a 45% stake in the shopping centre group – on paper Wainer may look like no more than a background player. Wainer’s networking has largely been credited with originating the deal between Hyprop and Attfund. Hyprop’s board has been pretty stable, but the high turnover in the executive team indicates someone else must be pushing the buttons.
Perhaps it’s a sentimental attachment, in that it was Wainer and Wolf Cesman who were instrumental in building Hyprop into what it currently is, but the truth is that when you have an investment in the region of R4bn in a company you tend to be hands-on, says an analyst.
Pieter Prinsloo was recently reappointed CEO, after Mike Rodel resigned.
“The deal ticks all the right boxes. The acquisition will dilute Redefine’s stake in Hyprop to less than 30% at a price of approximately R101m and should vastly improve tradeability of the stock. But Redefine’s stake is still material and I’d bet there’s another move to be made,” the analyst says.
Wainer’s role as puppet master may leave Hyprop shareholders a little nervous. However, personal intentions aside, the deal was a brilliant stroke to ensure the group maintains its growth. Large, high-quality malls are scarce and Hyprop’s largest asset – Cape Town’s Canal Walk – is entering a stage where additional growth opportunities are slowing down. In addition, its Rosebank Mall (north of Johannesburg) refurbishment is going to be a very expensive exercise. The bigger portfolio will dilute the impact of that expense on distributions.
Perhaps Redefine deserves the R101m transaction fee after all.
The two CEOs who ran Hyprop during the conclusion of the deal take on a minor role in the acquisition: Mike Rodel, the ex, and Pieter Prinsloo, the old new guy. Rodel shocked the industry when he announced his resignation in February, pretty much on the eve of the company’s biggest deal.
Team Attfund:
Louis Norval and Louis van der Watt: the new blood
Let’s face it: Hyprop’s assets were getting a little stale and had been sweated to within an inch of their lives. The new mix of properties – plus Norval and Van der Watt’s addition to the board – will breathe fresh life into the operation, say analysts.
Co-founders Norval and Van der Watt are respected players, sitting on must-have scarce assets.
The fact that the deal is looking a tad pricey is an indication Hyprop was forced to leave some of its swagger at the boardroom door. “It’s slightly overpriced and the premium is high considering the increase in debt Hyprop is taking on. But these kind of assets don’t come to the market that often,” says Naeem Tilly, of Avior Research. The group’s debt levels will rise by R4bn following the deal – largely attributed to the R3,6bn assumed from Attfund. The portfolio is bought at a net income yield of 7,5%, slightly lower than expected.
Tilly says the Attfund team is experienced, invested their own money in the business and will know how to extract maximum value from their specific assets. In a phone conversation, Marc Wainer seemed to look forward to the differences of opinion the new Attfund team will bring to the table. There won’t be any “yes men” here, he says.
Finweek looks at the players behind the deal to find out who’s pulling the strings and how that will impact on Hyprop’s bid to get growth back to its bottom line.
Team Hyprop:
Marc Wainer: The puppet master
Wainer is the de facto mover and shaker behind the Hyprop Investments [JSE:HYP] deal. As non-executive director of Hyprop and CEO of Redefine Properties – which holds a 45% stake in the shopping centre group – on paper Wainer may look like no more than a background player. Wainer’s networking has largely been credited with originating the deal between Hyprop and Attfund. Hyprop’s board has been pretty stable, but the high turnover in the executive team indicates someone else must be pushing the buttons.
Perhaps it’s a sentimental attachment, in that it was Wainer and Wolf Cesman who were instrumental in building Hyprop into what it currently is, but the truth is that when you have an investment in the region of R4bn in a company you tend to be hands-on, says an analyst.
Pieter Prinsloo was recently reappointed CEO, after Mike Rodel resigned.
“The deal ticks all the right boxes. The acquisition will dilute Redefine’s stake in Hyprop to less than 30% at a price of approximately R101m and should vastly improve tradeability of the stock. But Redefine’s stake is still material and I’d bet there’s another move to be made,” the analyst says.
Wainer’s role as puppet master may leave Hyprop shareholders a little nervous. However, personal intentions aside, the deal was a brilliant stroke to ensure the group maintains its growth. Large, high-quality malls are scarce and Hyprop’s largest asset – Cape Town’s Canal Walk – is entering a stage where additional growth opportunities are slowing down. In addition, its Rosebank Mall (north of Johannesburg) refurbishment is going to be a very expensive exercise. The bigger portfolio will dilute the impact of that expense on distributions.
Perhaps Redefine deserves the R101m transaction fee after all.
The two CEOs who ran Hyprop during the conclusion of the deal take on a minor role in the acquisition: Mike Rodel, the ex, and Pieter Prinsloo, the old new guy. Rodel shocked the industry when he announced his resignation in February, pretty much on the eve of the company’s biggest deal.
Team Attfund:
Louis Norval and Louis van der Watt: the new blood
Let’s face it: Hyprop’s assets were getting a little stale and had been sweated to within an inch of their lives. The new mix of properties – plus Norval and Van der Watt’s addition to the board – will breathe fresh life into the operation, say analysts.
Co-founders Norval and Van der Watt are respected players, sitting on must-have scarce assets.
The fact that the deal is looking a tad pricey is an indication Hyprop was forced to leave some of its swagger at the boardroom door. “It’s slightly overpriced and the premium is high considering the increase in debt Hyprop is taking on. But these kind of assets don’t come to the market that often,” says Naeem Tilly, of Avior Research. The group’s debt levels will rise by R4bn following the deal – largely attributed to the R3,6bn assumed from Attfund. The portfolio is bought at a net income yield of 7,5%, slightly lower than expected.
Tilly says the Attfund team is experienced, invested their own money in the business and will know how to extract maximum value from their specific assets. In a phone conversation, Marc Wainer seemed to look forward to the differences of opinion the new Attfund team will bring to the table. There won’t be any “yes men” here, he says.
