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Small related party transaction - Acquisition of Thibault REIT Limited
HERIOT REIT LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 2017/167697/06)
(Approved as a REIT by the JSE)
JSE share code: HET
ISIN: ZAE000246740
("Heriot" or "the Company")
SMALL RELATED PARTY TRANSACTION - ACQUISITION OF THIBAULT REIT LIMITED
1. INTRODUCTION
Heriot shareholders are advised that the Company has today, 11 June 2024, entered into an exchange
agreement, in terms of section 42 of the Income Tax Act 58 of 1962 ("Exchange Agreement"), with
Thibault REIT Limited ("Thibault") and the shareholders of Thibault listed in 5.2 below ("Thibault
Shareholders"), in terms of which Heriot will acquire 100% of the issued shares in Thibault held by the
Thibault Shareholders in exchange for the issue of 63 866 124 shares ("Consideration Shares") in the
Company ("Acquisition"). Following the successful implementation of the Acquisition, Thibault will be a
wholly owned subsidiary of Heriot and will subsequently be delisted from the Cape Town Stock Exchange
("CTSE").
2. DETAILS OF THE BUSINESS OF THIBAULT
Thibault is a property holding and investment company that has been approved as a REIT and is currently
listed on the CTSE. Thibault was established by Steven Herring, the founder of Heriot. The current portfolio
of Thibault comprises of retail, office and residential space, with a combined gross lettable area ("GLA")
of 87 521.67m², valued at R1.758 billion. In addition, Thibault holds a 10.02% interest in Safari REIT
Limited ("Safari Interest") and a 19.33% interest in Texton REIT Limited.
3. RATIONALE FOR THE ACQUISITION
The Acquisition is consistent with the Heriot group's primary objective to explore strategic opportunities
to grow and streamline Heriot's asset base by acquiring high-yielding properties in its target markets. In
addition, the Acquisition aligns with Heriot's stated strategy to increase its shareholding in Safari (given
Thibault's current Safari Interest), as Heriot considers both Safari's and Thibault's property portfolios
complementary to its own portfolio.
4. EFFECTIVE DATE
The effective date of the Acquisition will be Friday, 28 June 2024 ("Effective Date") and the Acquisition
will be implemented on the same date.
5. CONSIDERATION
5.1. The consideration for the Acquisition is an amount of circa R1,1 billion, which will be settled through
the issue of the Consideration Shares to the Thibault Shareholders on the Effective Date, with each share
in Thibault being acquired for 0.62 shares in Heriot (equating to an exchange ratio of 62 new Heriot
shares for every 100 Thibault shares in issue).
5.2. The Thibault shares held and the number of Heriot shares that will be received by Thibault Shareholders
is as follows:
Thibault shareholder Number of Thibault Number of Heriot shares to
shares held be received
Heriot Investments Proprietary Limited 100 602 528 62 373 567
Richard Lawrence Herring 900 000 558 000
Janys Ann Finn 450 000 279 000
Grant Warren Elliott 450 000 279 000
Daryl Sher 427 350 264 957
Werner Fourie 45 000 27 900
Juliana Matiza 45 000 27 900
Lucille Murray 45 000 27 900
Tamzyn Piedt 22 500 13 950
Samantha Thiart 11 250 6 975
Palesa Shabalala 11 250 6 975
6. CONDITIONS PRECEDENT
The Acquisition is not subject to any outstanding conditions precedent.
7. SIGNIFICANT TERMS OF THE EXCHANGE AGREEMENT
The Exchange Agreement contains limited fundamental representations and warranties provided by the
Thibault Shareholders to Heriot.
8. DETAILS OF PROPERTY PORTFOLIO
The property portfolio of Thibault and its subsidiaries ("the Group") comprises the following properties:
Property Location Sector GLA (m²) Weighted Fair value
Name average gross attributable
rental (m²) to property
One Thibault Cape Town Office/ 24 362.67 R167.64 ¹ R685.0 million
Square City Residential
Centre,
Western
Cape
Helderberg Somerset Retail 21 395.00 R189.42 R270.0 million
Centre West, Western
Cape
14th Avenue Roodepoort, Retail 25 541.00 R208.11 R475.0 million
District Gauteng
Shopping
Centre
Sun Valley Noordhoek, Retail 16 223.00 R189.63 R320.0 million
Mall Western Cape
Notes:
1. Weighted average gross rental of One Thibault Square relates only to the office GLA of 16 339.00 m².
The performance of the residential GLA of 8 072.00 m² is measured relative to the occupancy levels
and average nightly room rates.
2. No additional property related expenditure was incurred by the Company in connection with the
Acquisition.
3. The properties were externally valued by Peter Parfitt of Quadrant Properties Proprietary Limited, who
is registered as a professional valuer in terms of the Property Valuers Profession Act, No 47 of 2000
and is an independent valuer as such term is contemplated in the JSE Limited Listings Requirements
("Listings Requirements"). The effective date of the valuations was 31 December 2023.
9. FINANCIAL INFORMATION
In terms of Thibault's unaudited consolidated interim financial results for the 6 months ended 31 December
2023, Thibault's net asset value amounted to R1,103 billion, while its total comprehensive income
amounted to R73,497 million for the six months ended 31 December 2023.
10. SMALL RELATED PARTY TRANSACTION
10.1. Heriot Investments Proprietary Limited ("Heriot Investments") is a material shareholder of Heriot,
holding circa 86.76% of the issued share capital of Heriot. Heriot Investments is also a material
shareholder of Thibault, holding circa 97.66% of the issued share capital of Thibault. Heriot Investments
is 100% owned by The Gusi Trust, being a trust of which Steven Herring, a director of Heriot and
Thibault, and his family are beneficiaries and is a related party of Heriot in terms of paragraph 10.1(b)(i)
of the Listings Requirements.
10.2. In addition, Richard Herring and Janys Finn, both directors of Heriot, are also shareholders of Thibault
(Janys Finn is also a director of Thibault) and are related parties of Heriot in terms of paragraph
10.1(b)(i) of the Listings Requirements.
10.3. Accordingly, the Acquisition constitutes a transaction with related parties, as defined in terms of
paragraph 10.1(b) of the Listings Requirements of the JSE Limited. Based on the number of
Consideration Shares to be issued, the Acquisition constitutes a small related party transaction in terms
of paragraph 21.12(b) of the Listings Requirements.
10.4. In compliance with paragraph 10.7(b) of the Listings Requirements, Questco Corporate Advisory
Proprietary Limited ("Questco") was appointed by the Company as the independent professional expert
and has furnished the board of directors of the Company ("Board") with its fairness opinion confirming
that the terms of the Acquisition are fair insofar as Heriot shareholders are concerned ("Fairness
Opinion"), which Fairness Opinion has been approved the JSE Limited.
10.5. The Fairness Opinion can be inspected at the registered office of the Company and/or through a secure
electronic manner at the election of the person requesting the inspection for a period of 28 days from
the date of this announcement. Shareholders who wish to view the Fairness Opinion should send their
request to the Company's chief financial officer at dsnoyman@heriot.co.za, who will facilitate access
to the same.
11. OTHER
For purposes of paragraph 9.16 of the Listings Requirements, the Company shall ensure that, after the
Effective Date, nothing in the constitutional documents of Thibault will, in any way, frustrate or relieve the
Company from compliance with the Listings Requirements.
Johannesburg
11 June 2024
Transaction advisor and Designated
advisor
Valeo Capital (Pty) Limited
Independent Expert
Questco Corporate Advisory Proprietary
Limited
Date: 11-06-2024 04:30:00
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