In 2002, iProp Holdings Limited (formerly RMP Properties Limited), a JSE-listed company with a 35-year history had devolved into a small company, illiquid and trading at a deep discount to its net asset value.

The company had been operating under challenging conditions due to sensitivities around mining assets and land distribution, and by 1997 a disposal of its various assets was put into motion. By mid 2002, the major portion of the investment property portfolio had been sold to iFour Properties Limited.

In early 2003, a management buyout was proposed of iProp’s remaining assets and liabilities, following which the company would be delisted and voluntarily wound up.  Accordingly, on 21 January 2003, iProp’s board of directors announced the offer made by Clidet No 433 (Pty) Limited (“Clidet”) (a company formed by the management team) of a net amount of R83.9 million, which equated to R5 per iProp share on a fully diluted basis.

In an unexpected turn of events, financial services company Mettle Limited (“Mettle”) made an uninvited counter-bid of R92.6 million.

In South Africa hostile transactions, being considered particularly risky, were largely unchartered territory at the time. It was at this point that Clidet, under the leadership of majority shareholder Petro Heydenrych, appointed Bravura to advise on the management buy-out transaction which had unpredictably turned into a complex and challenging process.

A bidding war ensued with Mettle and Clidet both making improved offers. During the intensive negotiations led by Bravura, Mettle made clear its intention to continue making counter offers against the management team until it had acquired iProp.

Bravura therefore continued to negotiate and facilitate a transaction which saw Petro Heydenrych and the other members of the I-Prop management team and Mettle each holding 50% of Clidet. By the end of May 2003, iProp’s shareholders had accepted the Clidet offer and the delisting of iProp Holdings Limited followed.

A few years later Bravura assisted the members of the I-Prop management team in a successful buyout of Mettle’s stake in Clidet, thereby obtaining 100% control of I-Prop.  Today, Petro Heydenrych remains at the helm of iProp Limited, a multi-million Rand group involved in the development and sale of township land for commercial, industrial, retail and investing purposes, leasing, and managing of buildings.

Categories: Corporate Finance, News, Transactions,

Published: 11 June 2019