The battle for control of property group MAS, a listed mall owner in Central and Eastern Europe, has reached a turning point after Hyprop Investments launched its bid on Friday, giving MAS shareholders a choice between cashing out or remaining invested through Hyprop shares.
This follows months of rising tension inside MAS, fuelled by a failed buyout deal, suspended dividends and deepening shareholder frustration with the company’s complex joint venture structure. Now, MAS shareholders are weighing two starkly different options for the future of the business.
Hyprop’s offer revealed in a Sens announcement gives MAS shareholders the option to sell their shares for R24 in cash up to a total of R800m or exchange them for Hyprop shares at a fixed ratio. The deal also offers flexibility to choose a combination of both options, but it is conditional on Hyprop securing more than 50% of MAS’s issued share capital.
If successful, Hyprop plans to consolidate MAS into its own operations, gaining a stronger presence in Romania, Bulgaria, and Poland. The company said shareholders who opt for Hyprop shares will remain exposed to MAS’s assets and benefit from future growth under stronger, simpler governance.
Hyprop has already raised the R800m through a share placement to fund the bid. The cash offer is capped, meaning that if more shareholders want cash than the budget allows, some will have to accept Hyprop shares instead.
MAS is not being sold because it is failing. On the contrary, its shopping centres have performed well. Footfall is up, tenant sales are rising and rent collection rates are near perfect. But behind the operational results lies a governance structure that has become increasingly difficult to manage.
In 2016 MAS entered into a joint venture with Prime Kapital, a Romania-based real estate developer, to accelerate its expansion in Eastern Europe. That venture helped MAS triple its portfolio in under a decade. But it also introduced complexity, blurred responsibilities, and concern about transparency.
In 2023, MAS suspended dividend payments due to disagreements over how profit from the joint venture should be shared. Shareholders began to question whether MAS could function effectively while tied to a structure where Prime Kapital held 60% of the development venture. The company’s share price fell as confidence eroded.
Earlier this year, MAS tried to buy out Prime Kapital’s stake in the joint venture, but the deal fell apart before it could be put to shareholders. The breakdown exposed a deep rift and left MAS without a clear strategy, triggering competing proposals from two major stakeholders: Hyprop and Prime Kapital’s subsidiary, PK Investments (PKI).
PKI initially planned to acquire all outstanding shares in MAS. But after feedback from investors, it changed its strategy. Instead of taking control, PKI now wants MAS to sell off all its assets over five years and return the proceeds to shareholders via special dividends believing that this will deliver maximum value without needing to overhaul the company’s ownership.
PKI put this plan to a shareholder vote at an extraordinary general meeting held on July 11. The proposal included a commitment to unwind the development joint venture earlier than originally agreed, and to align profit distributions with what MAS believes is a fairer method. However, even if the resolutions passed, MAS’s board still retains discretion on whether and how to implement them.
In their ambitious and aggressive bids, PKI and Hyprop seemingly bypassed board oversight. MAS revealed in their June 30 voluntary update that neither Hyprop nor PKI consulted the board before launching their respective proposals. In response, the board appointed independent advisers and pledged to act in the best interest of all shareholders. It has also committed to improving board independence and transparency, including publishing a summary of the joint venture agreement and its extension terms.
While MAS continues to trade at a discount to its net asset value, according to the Financial Mail, the business itself is performing well. Its new flagship development, Mall Moldova, opened in April and has already attracted strong tenant and shopper activity. The company expects to meet its earnings guidance for the financial year to end-June.
The company also faces liquidity and refinancing challenges, with a bond maturing in 2026 and capital requirements tied to both operations and the development venture.
Hyprop has said it will move forward with its bid if it secures enough shareholder support by July 25. If successful, the deal could be finalised by the end of October.
After falling as much as 5.4% in intraday trade, by 4pm shares in MAS had regained most of the losses to be down just 0.13% to R22.72. The company, which listed on the JSE in August 2009, has seen its share price double in value since then and now has a market cap of about R16.3bn.
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