MAS shareholders urged to reject Hyprop’s value-destructive offer

Martin Slabbert

Hyprop’s offer fails JSE standards and is a disguised free option request

PK Investments Limited (“PKI”), the largest shareholder in MAS, has highlighted that the Hyprop offer is inconsistent with the JSE Listings Requirements governing corporate actions, specifically the requirement for an offer to remain open for 12 days after becoming unconditional. More importantly, the offer is not a bona fide attempt to acquire MAS shares, but rather a cleverly disguised request for MAS shareholders to grant Hyprop free options to acquire their shares at a future date - and at a price far below market value, intrinsic value, and competing offers.

In essence, this proposal gives Hyprop the right - but not the obligation - to acquire MAS shares from independent shareholders at a future date, under terms determined by Hyprop, but which offer must be accepted by 25 July 2025. The option is "free" in as Hyprop is not required to pay anything upfront for the right to acquire MAS shares in the future. This gives Hyprop a significant advantage, as it can choose to exercise the option only if it is beneficial to them, while shareholders receive no compensation for granting this right, and are prevented from considering alternatives.

“The Hyprop proposal is engineered to prevent shareholders from considering alternative offers, locking them into an arrangement that is materially below current trading levels, MAS’s NAV, and PKI’s own offer. This is essentially a free call option to Hyprop, with no fixed timeline for implementation. The inherent risk for shareholders if they accept the Hyprop free option is that they will be tied up without any time limitation or alternatives as Hyprop seeks to obtain regulatory, shareholder and other approvals. This carries zero risk for Hyprop with shareholders exposed to significant transaction risk,” said Martin Slabbert, CEO of Prime Kapital.

Moldova Mall

Cash portion is a 'smoke and mirrors' exercise

The so-called cash component in Hyprop’s proposal is a “smoke and mirrors” exercise, designed to distract from the deeply unattractive pricing of the equity swap.

The cash portion covers only a fraction of the free options Hyprop is seeking, with the equity swap component valuing MAS at just R18.03, or €0.88 per share — far below Friday’s market close (22% discount), MAS’s IFRS NAV (48% discount), PKI’s cash offer of €1.40 per share (37% discount), and PKI’s equity offer currently valued at €1.50 per share (42% discount), which also provides a guaranteed cash exit at 90% of MAS’s adjusted NAV per share.

Key shortcomings of the Hyprop offer:

• The offer is essentially a share swap proposal at a ratio very unfavourable to MAS shareholders.
  
• The cash offer covers just 5% of MAS’s market capitalisation, represents only a 4% premium to the current share price for control of the business, and is a 31% discount to IFRS NAV, 17% discount to PKI’s cash offer and 22% discount to PKI’s equity floor level.
  
• The offer forces MAS shareholders to dilute their high-quality CEE real estate exposure in favour of a riskier South African real estate profile, with limited rand hedge, convoluted corporate structure and a management team with substantially less experience and focus on CEE assets.
  
• The offer’s conditions give Hyprop a free option to acquire control, stripping shareholders of their rights to consider alternatives.
  
• Shareholders who accept the Hyprop offer before it becomes unconditional will be severely prejudiced, losing their ability to consider superior alternatives and will be further exposed to the risk of extended and substantial price overhang due to the insignificant cash component.

Moldova Mall

Superior offer from PK Investments Limited

PKI has tabled a voluntary offer that is significantly more attractive for MAS shareholders:

• c. R28.80 per share, compared to Hyprop’s R24.00 per share.
  
• Over R2.2bn cash cap, versus just R800m from Hyprop; with the current MAS holdings of PKI and its shareholders, this offers a c.17% cash cover for the remaining MAS shares (versus Hyprop cash cover of a meagre c.5%).
  
• The listed cash alternative has direct exposure to MAS’s CEE assets, as opposed to Hyprop’s South African-focused portfolio
  
• The listed cash alternative has guaranteed minimum returns, upside linked to MAS NAV and a guaranteed exit.
  
• Experienced and proven management team dedicated to CEE real estate, not a diversified South African/European portfolio.

A defining moment for governance and shareholder value

“The manner in which the Hyprop offer has been conducted raises profound governance and regulatory concerns,” added Slabbert. “The offer is not a genuine acquisition, but an attempt to secure control without paying for it - at a price that deeply undervalues MAS in an attempt to hoodwink minority and vulnerable shareholders. This is not just a corporate power grab. It is a fundamental test of governance, fairness, and transparency in South Africa’s capital markets. Independent MAS shareholders - and the JSE itself - are at risk of becoming collateral damage in a scheme engineered by a small group of self-interested actors.”

A call for unity among MAS shareholders

This is a crucial time for MAS. Unity among independent shareholders is essential to protect value, fairness, and high governance standards. PKI remains fully committed to safeguarding shareholder interests and achieving the best possible outcome for all.