South African Property Companies in Talks on $877 Million Merger
South Africa’s Ascension Properties Ltd. (AIB), Delta Property Fund Ltd. (DLT) and Rebosis Property Fund Ltd. (REB) are considering a three-way merger to improve access to cheaper debt and boost capacity to make acquisitions.
“The proposed merger is expected to position the merged entity to make further yield-enhancing acquisitions,” the companies said in a statement today. “Its increased size should provide greater access to debt and capital markets at competitive rates and generally to have a lower cost base.”
The new entity would have a market capitalization of about 9.5 billion rand ($877 million), making it the largest listed black economic empowerment property fund on the Johannesburg Stock Exchange, the companies said, referring to the post-apartheid South African system of redistributing corporate ownership to the black population. The merged company will manage assets of more than 16.5 billion rand.
Ascension’s stock gained 4.4 percent as of 11:24 a.m. in Johannesburg, the most on an intraday basis in three weeks. Delta and Rebosis were unchanged.
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