Canal Walk and Rosebank Mall owner in big battle for major shopping centres
Hyprop, the owner of Canal Walk, Rosebank Mall, Hyde Park Corner and many more, is in a takeover battle with PK Investments (PKI) for an international shopping mall portfolio owned by MAS.
Hyprop is trying to acquire a controlling shareholding in MAS, which owns a portfolio of shopping malls in Bulgaria, Romania and Moldova.
Hyprop has offered MAS shareholders the opportunity to sell their MAS shares in exchange for Hyprop shares and/or for cash, subject to the fulfilment of certain conditions and limitations.
It is offering shareholders the option to sell their MAS shares, wholly or partially, for cash of R24.00 per share and/or Hyprop shares at a swap ratio of 0.42224 Hyprop shares for every MAS share held.
Although the cash alternative is subject to a maximum of R800 million, Hyprop’s share alternative offer is unlimited, which it claims offers a highly liquid share that can be sold in the market for cash.
MAS shareholders could also simply retain the Hyprop share and remain indirectly invested in MAS.
Hyprop’s voluntary bid remains open for acceptance by MAS shareholders until 12h00 SA time on Friday, 25 July 2025. Hyprop said that this date may be amended.
If the Hyprop Voluntary Bid becomes unconditional and is implemented, Hyprop will acquire registered and beneficial ownership of all the MAS shares.
Hyprop’s Eastern European property portfolio already contains wholly-owned properties in Croatia, Bulgaria, and North Macedonia, so the acquisition aligns with its diversification strategy.
Largest shareholder fights back
PKI has responded to the Hyprop offer, stating it is inconsistent with the JSE Listings Requirements governing corporate actions.
This mainly relates to the requirement for an offer to remain open for twelve days after becoming unconditional.
More importantly for PKI, the offer is not a bona fide attempt to acquire MAS shares, but rather a request for MAS shareholders to grant Hyprop free options to acquire their shares at a future date.
It said that this price would be far below market value, intrinsic value and competing offers.
The 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 25th July 2025.
The option is “free” in that Hyprop is not required to pay anything upfront for the right to acquire MAS shares in the future.
PKI said this gives Hyprop a major advantage, as it can choose to exercise the option if it only benefits them. It claims shareholders receive no compensation for granting this right.
“The Hyprop proposal is engineered to prevent shareholders from considering alternative offers, locking them into an arrangement materially below current trading levels,” said Martin Slabbert, CEO of Prime Kapital.
“This is essentially a free call option to Hyprop, with no fixed timeline for implementation.”
“The inherent risk for shareholders is that they will be tied up without any time limitation or alternatives as Hyprop seeks to obtain regulatory, shareholder and other approvals.”
Slabbert has deep ties to MAS, having served as its CEO until 2022. He said the move carries zero risk for Hyprop, with shareholders exposed to significant transaction risk.
PKI further claimed that the cash portion is a “smoke and mirrors” exercise designed to distract from the equity swap’s unattractive pricing.
It further said that the cash portion only covers a fraction of the free options Hyprop is seeking, with the equity swap valuing MAS at just R18.03, a 48% discount on MAS’s net asset value (NAV).
However, it is crucial to note that PKI are also attempting to acquire MAS, and has tabled a voluntary offer of R28.80 per share, compared to Hyprop’s R24.00 per share.
It added that it has an over R2.2 billion cash cap, far higher than Hyprop’s R800 million, with the current MAS Holdings of PKI and its shareholders.
This offers a roughly 17% cash cover for the remaining MAS shares, compared to Hyprop’s 5%.
It noted that the listed cash alternative has direct access to MAS’s assets, unlike Hyprop’s South African-focused portfolio.
“The listed cash alternative has guaranteed minimum returns, upside linked to MAS NAV and a guaranteed exit,” said PKI.
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