Synergy Income Fund (Synergy) is now a listed subsidiary of Vukile Property Fund (Vukile), as the drawn-out move to gain control of the small-cap fund is put to bed.
Vukile in a Sens announcement on Monday said that its mandatory offer to acquire all the remaining shares in Synergy it did not own was welcomed by the market.
Vukile, with a market capitalisation of R11.5 billion, now holds 87.62% of Synergy B-linked units and 11.88% of Synergy A-linked units. This effectively means that Vukile has a combined stake and voting rights into Synergy of 64.2%.
Vukile made an offer to acquire the remaining Synergy B-linked units at a swap ratio of one Vukile-linked unit for every 2.67 Synergy B-linked units. It has extended a comparable offer to Synergy A-linked unit holders at a swap ratio of one Vukile-linked unit for every 1.65 Synergy A-linked units. The offer to unit holders lapsed on Friday.
In its estimates, when the offer was open to unit holders, Vukile said it would raise its stake in the company’s B-linked units to 75% and A-linked units to 8.5%. This would bring Vukile’s combined stake and voting rights into Synergy to 55%.
CEO of Vukile Laurence Rapp told Moneyweb that the property counter would keep Synergy listed.
Vukile’s new clout would see exposure to Synergy’s retail assets, as it looks to beef its retail exposure to 60% of its portfolio mix.
Vukile would own Synergy’s specialised portfolio of 15 medium-sized community shopping centres in rural areas and townships worth about R2.4 billion.
Quarters of the listed property sector welcomed the conclusion of the deal, citing that drawn out deals have the potential to lead to fatigue. The deal between the two listed counters signals fresh consolidation for the property sector.
Vukile shares were down 1.72% to R18.87 during Monday’s trade.