Hyprop Investments Ltd., a South African real-estate investor, agreed to buy Attfund Retail for 8.99 billion rand ($1.3 billion) to add shopping malls.
Hyprop will make the purchase with cash and stock and plans to issue 112 million shares at 54 rand each, the Johannesburg- based company said in a stock exchange statement today. The price includes the assumption of debt.
“Hyprop may be paying too much,” Thabo Motloung, an analyst at Old Mutual Investment Group in Cape Town, said by telephone. Attfund Retail’s shopping centers are in mature areas and are likely to grow no faster than the rest of the property market, “so you don’t want to pay a premium,” he said.
Attfund Retail, which is changing its name from Femtoworx Ltd., owns properties including Atterbury Value Mart and Woodlands Boulevard in Pretoria and the Clearwater Mall and Lifestyle Centre in western Johannesburg.
Redefine Properties Ltd., Hyprop’s largest shareholder, will be paid a 130 million-rand transaction fee by Attfund Retail shareholders as part of the deal. The payment will be made from the cash portion of the settlement price, it said.
Hyprop shares rose 1.7 rand, or 3 percent, to close at 56 rand in Johannesburg.