RMB Holdings (RMH) plans to dispose of its stake in Eastern Europe-focused Atterbury Europe Holdings to Brightbridge Real Estate, in a R1.75 billion cash deal that is likely to be passed on to shareholders by way of special dividend.
”The company will aim to maximise the value returned to shareholders, likely in the form of another special dividend,” RMB said in a statement on Friday.
The sale price is a substantial 32 percent below Atterbury’s net asset value of the shareholding - this value equates to about R2.23bn based Atterbury’s full net asset value of R5.97bn as at March 31.
Despite this, RMH’s share price climbed a sharp 10.97 percent to close at R1.72 on Friday.
In one of the more unusual conditions precedent for such a deal, Brightbridge would be allowed to terminate the deal if a “material adverse event” occurred, which RMH said meant “if Russia commences war, military operations, or an invasion against a NATO country, whether as a consequence of Russia’s war against Ukraine or not.”
The deal was entered into between RMH’s subsidiary RMH Property, and Brightbridge Real Estate, that would also include all the shareholder loan claims and the A ordinary shares held by RMH Property in Atterbury Europe Holding, which represent 37.5 percent of the shares in Atterbury.
Outlining the reasons for the deal, RMH said RMH Property had expanded its investment strategy in 2016 to include a property investment business, RMH Property, alongside its 34.1 percent investment in FirstRand.
This expansion involved establishing a portfolio of scalable entrepreneur-led businesses with proven track records in developing and managing unlisted property portfolios.
In 2020, RMH’s shareholding in FirstRand was unbundled, and resulted in shareholders remaining with sole exposure to RMH Property’s property portfolio.
At the time, RMH’s board said it would continue to assess options to monetise the portfolio.
RMH’s board said Brightbridge, an existing Atterbury shareholder, was the most suitable acquirer of the interest in Atterbury, especially as it had “deep knowledge of the businesses and contractual arrangements in the Atterbury Europe group”.
Brightbridge is an investment holding and real estate services company in Cyprus, founded in 2014 by a consortium of private equity investors to provide property, asset management and development management services as well as holding real estate investments in Cyprus and Eastern Europe.
“Atterbury has shown it is well-positioned to take advantage of property development opportunities in Eastern Europe over the long-term, given the strength of its partnerships and its ability to raise debt capital to fund growth optimally,” RMH said on Friday.
RMH's net asset value increased by 12 percent to R3.91bn as at March 31.
This was due mainly to a recovery of property valuations as a result of the Covid-19 cap rate penalty being removed by external valuators in Eastern Europe.
This led to a rise in valuations of R543 million (2021: loss of R22m). Taxed income rose more than 100 percent to R611m, from a R72m loss in the nine months to March 31, 2021.