"While each of Delta and Rebosis is satisfied with the outcome of their due diligence investigations‚ they have agreed that a tripartite merger is not currently opportune. Rebosis will continue to consider whether or not to make any general offer to Ascension or its linked unit-holders and in the event that an offer is made‚ Delta has resolved to support Rebosis in any transaction relating to Ascension‚" Delta and Rebosis said in a joint statement.
The decision not to merge did not surprise analysts. Instead they were pleased that cancellation appeared amicable.
"It was always the understanding that the merger made strategic sense‚ but presented practical challenges which seems to have been unable to overcome. It is good that an amicable solution could be reached‚" Anton de Goede of Coronation Fund Managers said.
In February both Delta and Rebosis tried to buy Ascension Properties‚ another BBBEE fund. At one point Ascension had made deals to be bought out twice‚ effectively one by each of the companies. To avoid the complicated mess that would follow‚ a triple merger was proposed.
The funds‚ which listed only a few years ago‚ would have become a medium-sized company‚ with a combined portfolio of R13bn and market capitalisation of R8bn if the merger was successful. The new fund would have offered investors exposure to government-tenanted offices and shopping centres.
Rebosis bought Ascension's management company for R150m but not all the shares in Ascension. It bought a 29% stake in Ascension's B units for R289m. Delta still held Ascension shares.
But Delta announced it had sold all of its Ascension shares to Rebosis.
"This is a sign that the funds had made an amicable joint decision‚" said Stanlib's Fund Manager‚ Keillen
Ndlovu.
"It's not our best outcome but the positive thing is that Delta and Rebosis are partying ways in a graceful manner‚ as indicated by Delta selling Ascension to Rebosis.
"The merger was a more of a compromise to avoid a long and dirty fight for Ascension. It had turned out to be a blessing in disguise as it would have created a larger and more liquid fund with critical mass‚" he said.
Delta's Chief Financial Officer Bronwyn Corbett said that the merger came at an inopportune time.
"Delta is currently launching an Africa-dedicated fund. Rebosis also have various projects on the go. The merger would not work at this time‚" she said.
Attempts to reach Rebosis were unsuccessful.
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