Hyprop vs PK Investments: A competitive landscape for MAS shareholders

South African REIT, Hyprop Investments, on Friday formally entered the bidding for JSE-listed Central and Eastern Europe (CEE) retail and mixed-use property company MAS, by releasing the terms of a share and cash offer.

Hyprop said its offer was better for MAS’ shareholders than the last offer by MAS’ major shareholder and joint venture partner Prime Kapital Investments (PKI) because voluntary bid participants in the Hyprop offer could expect to easily convert their share consideration into cash should they wish, after the deal is done.

“This is in contrast to the unknown liquidity of the instruments being proposed for an offer to MAS shareholders in terms of the intended bid by PKI Limited,” Hyprop’s directors said.

Hyprop and the PKI bids add to the MAS board's current complex workload, as there is also a dispute between MAS directors and PKI about the terms of their joint venture development agreement, while a number of South African minority shareholders also want to replace and appoint new board members in MAS.

Hyprop said in a statement to the JSE on Friday that it has raised R808 million in an accelerated bookbuild to support the cash portion of the voluntary bid.

The cash consideration of R24 per MAS share represents a 32.60% premium to the 30-day average price of R18.10 per MAS share for a 30-day period ending on May 23, 2025, the last day prior to Hyprop saying it wanted to make a formal offer for MAS.

The share consideration of 0.42224 Hyprop shares for one MAS share was based on the ratio of the Hyprop share price and the MAS share price on May 23. Based on Hyprop’s current share price, this represents a 3.38% premium to the 30-day average MAS share price to May 23.

Hyprop said the cash alternative is to a maximum of R800m, while the alternative share offer is unlimited, and MAS shareholders will receive “a highly liquid Hyprop share that can be sold in the market for cash or retained and allow MAS shareholders to remain indirectly invested in MAS and benefit from an unlock in value of MAS shares.”

Hyprop's Eastern European property portfolio was valued at Є620m at December 31, 2023, and comprises properties in Croatia, Bulgaria, and North Macedonia.

Its directors said MAS, which would make up about one-third of Hyprop’s net asset value post-transaction, would align with their diversification strategy to invest further in the CEE region.

“The Hyprop board has significant retail, property, and CEE market experience, which is augmented by Hyprop's strong Eastern European regional management team's expertise and proven track record,” they said.

Hyprop’s directors said they intend to resolve “complex” shareholder/joint venture arrangements, unlock value for MAS shareholders, and accelerate MAS' progress towards resuming regular dividend payments.

“When viewed together with Hyprop's existing assets, benefits for MAS and Hyprop would include scale, geographic diversification, and potential synergies in the CEE region,” they said.

PKI’s last offer to MAS shareholders includes a Є1.40 per share cash offer, up from a previous offer of €1.10, while they also increased the maximum cash amount from Є80m to Є110m. Shareholders may also receive non-voting preference shares in PK Investments, with the face value raised from €0.90 to €1.50.

Hyprop’s share price fell 1.13% to R43.81 on Friday afternoon, but the price is still nearly 40% higher over a year. MAS’ share price was unchanged at R22.75 at the same time.

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