Investors give green light for Redefine merger

Madison unitholders today (Monday, 6 April 2009), voted in favour of the acquisition of the company by Redefine Income Fund, completing the last of the required investor approvals for the merger of Redefine Income Fund, ApexHi Properties and Madison Property Fund Managers. This transaction will create one of the largest listed property companies in South Africa, with an estimated market capitalisation of R18 billion.

Redefine Income Fund linked unitholders approved the acquisition on Thursday, 2 April 2009. Approvals from ApexHi A, B and C linked unitholders followed on Friday, 03 April 2009.

Says Brian Azizollahoff, CEO of Redefine Income Fund, “We are delighted that the acquisition has been approved by shareholders of all three companies. The only approvals still required are the regulatory approvals, including sanction of the ApexHi and Madison schemes of arrangement by the High Court (and the registration of the Court orders by the Registrar of Companies) and approval from the Competition authorities.”

The new Redefine is set to benefit from increased earnings, a sound management base drawn from the three companies, increased international investor interest, better access to funding, cost savings and enhanced competitiveness.

“ApexHi unitholders have, since the company’s inception, benefited from a strategy which, first and foremost, focused on achieving increased distributions for unitholders. The expanded Redefine will be in an even better position to achieve this objective,” notes Gerald Leissner, CEO of ApexHi.

Marc Wainer, executive director of Madison, points out that all unitholders will benefit from being part of a much larger fund which will be ideally positioned to take advantage of opportunities which may arise in the local and international markets.

Furthermore, a possible re-rating, based on increased earnings, size and liquidity could increase Redefine’s unit price. “A lower yield would make further revenue enhancing acquisitions easier to achieve,” says Wainer. The market capitalisation of the new Redefine could result in its inclusion in a number of stock exchange and property indices.

ApexHi and Madison linked unitholders will exchange their linked units for Redefine linked units at a swap ratio of 202 Redefine units for every 100 ApexHi A units, 246,8 Redefine units for every 100 ApexHi B units, 104 Redefine units for every 100 ApexHi C units and 90 Redefine units for every 100 Madison units.

Madison executive directors Wainer and Wolf Cesman have indicated their willingness to extend their existing service contracts, which are set to expire with Madison on 31 March 2011, by a further three years at no additional cost to Redefine.

The effective date of the acquisition of Madison and ApexHi linked units by Redefine is set for 1July 2009.