Roy Cokayne

A dispute is brewing between listed property companies Ascension, Rebosis and Delta over the purchase or disposal of the Ascension Property Management Company.

Ascension Properties and Rebosis Property Fund reported on Monday they had signed a co-operation agreement regarding a proposed merger and Rebosis had unconditionally acquired and taken delivery of all of the issued shares in Ascension Property Management Company for R150 million.

However, Delta Property Fund said yesterday that it had entered into an agreement on January 28 with certain of the shareholders holding a significant majority of the issued share capital of Ascension Property Management Company to acquire their stake in the company for R76.94m cash, thereby valuing it at R105m.

Delta stressed yesterday that in terms of the provisions of the agreement, Delta was entitled to receive a “break fee” of R10m if these shareholders elected not to enter into the “sale of the B-linked units agreement” for the sale to Delta of 109.36 million Ascension B-linked units for R2.75 a B-linked unit.

Delta said it had received legal advice regarding the Rebosis offer, indicating its own agreement was valid and enforceable against the signatories and the break fee would be due and payable if the sale to Delta was not concluded.

“Delta is considering their options in regard to their legal position and will update Delta linked unitholders in due course,” it said.

Ascension and Rebosis said the boards of the two companies had concluded a written co-operation agreement in terms of which each undertook to the other a duty of utmost good faith in co-operating to explore a merger to enhance their market capitalisation, investor liquidity and prospects.

They said real estate investment trusts with smaller market capitalisations were struggling to compete for capital, driving them to consolidation and corporate activity to best serve the interests of their linked unitholders and tenants.