Transcend Residential Property Fund looks set to become the latest company to leave the JSE as Emira has made a cash offer to take over the company, whose board believes it can no longer justify its listing on the local bourse.
The company, valued at about R1bn, also said that the limitations from the regulatory processes involved with being listed outweighed the benefits.
One of the reasons Transcend listed on the JSE in 2016 was to gain access to institutional investment funding and to grow its property portfolio, but according to Friday’s announcement, it has been hampered by the lack of investors looking to invest in smaller property companies.
The company added that its share price remained at a discount to its underlying net asset value, resulting in “any capital raise at market value being highly dilutive to existing” shareholders.
Emira, which owns a diversified property portfolio in SA and the US, is already the majority shareholder in Transcend with its 68.15% stake, and will now offer R6.30 per share with the backing of Absa.
Transcend shareholders SA Corporate, International Housing Solutions and IHS, with a combined stake of almost a fifth, indicated they will vote in favour of the deal.
Emira first bought a stake in Transcend in 2018, which focuses on affordable housing in high-growth urban areas in Gauteng and the Western Cape, and made a similar takeover offer in July 2022 before the deal fell through after Deloitte told Transcend’s independent board that it believes the terms of the offer were “unfair and unreasonable” to shareholders.
Fund manager Coronation warned in July that the exodus of listed companies from the JSE was making it harder for asset managers and investors to diversify their portfolios, placing their financial security at risk.
More than 20 companies delisted from the JSE in 2022 for various reasons, including M&As.
With Kabelo Khumalo
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