Ascension appears to sell company twice

One of many buildings in Ascension's portfolio of mostly government-tenanted properties. Image: Ascension

Though attempts at consolidation among the sector's smaller companies had been expected‚ fund managers said that shareholders of all three black-managed property firms were demanding to know how Rebosis and Delta could seemingly have been two-timed.

The situation is unprecedented and has raised fears that Ascension's lucrative R3.2bn portfolio of mostly government-tenanted offices would now become the subject of a protracted bidding war.

Early last week Ascension and Rebosis both issued a Stock Exchange News announcement saying that Rebosis had acquired Ascension's management company in its entirety for R150m.

It was also announced that the two companies had entered into a written co-operation agreement to explore a merger of Rebosis and Ascension.

Rebosis' chief executive Sisa Ngebulana said both funds wanted to preserve their black management and ownership credentials‚ which would allow them to remain a key provider of office space to the government and other empowerment sensitive tenants.

Confusing deals

The following day Rebosis announced it had acquired 15.96% of Ascension's shares for R289.8m from directors and major shareholder Cape Empowerment Trust.

But later that day Delta‚ which also owns a sizable government-tenanted portfolio‚ said it too had entered into an agreement with Ascension founder and executive director Shaun Rai to buy a 73% stake in Ascension's management company.

The deal would pave the way for a full takeover of Ascension‚ said Delta's chief executive Sandile Nomvete. He said the agreement was that Delta would pay R76‚9m for the 73% stake‚ which effectively values the management company at R105m.

That is 30% less than the price Rebosis has agreed to pay for Ascension's management company.

Delta subsequently announced that it had also concluded an agreement to buy a 17.75% stake in Ascension and that it had received letters of support from various institutional investors‚ who jointly held a further 23.65% stake‚ that would back Delta's takeover.

In a joint cautionary announcement issued last week afternoon‚ Rebosis and Delta said they had begun talks over their respective strategies with regard to the proposed takeover of Ascension.

Meanwhile‚ Ascension has remained tight-lipped on Delta's claims. Neither Rai nor his fellow directors returned any of Business Day's calls.

Meago Asset Managers director Jay Padayatchi said no one knew how the situation would play out, adding that it "could very well turn nasty".

Another analyst said Ascension's management team appeared to be "missing in action"‚ with no one yet owning up to what really transpired.

"We are now waiting in great anticipation to find out which one of the two contracts is legally binding and whether Rebosis or Delta will first increase their stakes in Ascension," the analyst said.

Source: Business Day via I-Net Bridge