Balwin Properties has received a firm intention offer from a consortium including the PIC, acting on behalf of the GEPF, together with Balwin founder investors, to acquire all eligible issued ordinary shares in Balwin for R4.35 per share in cash.

Balwin shareholders holding 163,975,952 shares, approximately 63.5% of the scheme shares, have indicated their support for, and to vote in favour, of the offer.

“This transaction brings together long-term domestic institutional capital from the PIC, acting on behalf of the GEPF, with the continued commitment of Balwin’s founder-management and other significant existing shareholders. Importantly, management and the reinvesting shareholders are not taking cash out of the transaction. They are remaining invested alongside the PIC because they believe in Balwin’s platform, its development pipeline and its long-term prospects,” comments CEO of Balwin Properties, Steve Brookes.

The offer represents a 41% premium to Balwin’s 180-day volume-weighted average price (VWAP) prior to the announcement, and a 35% premium to the 90-day VWAP.

The proposed transaction values Balwin’s issued share capital at about R2.26 billion, giving eligible shareholders the opportunity to realise cash at a premium to recent trading levels.

If approved and implemented by way of a scheme of arrangement, Balwin will become a wholly owned subsidiary of K2025746588 (South Africa) Proprietary Limited, and its shares will be delisted from the JSE and A2X.

The Bidding Consortium comprises the PIC and entities connected to Balwin’s founder investors including CEO Steve Brookes, MD Rodney Gray, and GRE Africa (Pty) Ltd., which is related to Buffet Investments. These parties are excluded from voting on the scheme of arrangement and will not receive cash considerations for their Balwin shares under the scheme. They will however remain invested alongside the PIC under the proposed private ownership structure.

With 519,411,852 Balwin shares in issue and 261,253,473 excluded shares, the maximum number of shares available for acquisition under the scheme is expected to be 258,158,379, implying a maximum cash consideration of approximately R1.12 billion payable to eligible shareholders.

Balwin listed on the JSE in 2015 with the bidding consortium of the belief that the listing is no longer as compelling, given the limited liquidity in Balwin shares, the discount to underlying NAV at which the shares have traded, and the costs associated with maintaining a listed-company structure.

The consortium intends to leverage its capital resources, strategic networks, and developmental focus to support Balwin’s objectives, with realising cost savings attributable to the delisting.

“Private ownership will better align Balwin’s funding base with the long-term nature of our development pipeline. With the support of the PIC, founder-management and our reinvesting shareholders, we believe Balwin will have the capital stability and strategic support required to strengthen its market position and continue delivering high-quality, environmentally efficient residential developments,” adds Brookes.

The proposed transaction remains subject to the fulfilment or waiver, where applicable, of a number of conditions, including shareholder approvals, relevant third-party consents, competition authority approval, other regulatory approvals and the issue of a compliance certificate by the Takeover Regulation Panel.