Accelerate waves goodbye to Portside (JSE: APF)
The best view in Cape Town has a new buyer
I’ve had the immense joy (quite recently, actually) of seeing the view from the top of the Portside building. It’s every bit as spectacular as you imagine it would be. In case you aren’t familiar with the Cape Town CBD (the only functional CBD in the country), Portside is the very tall glass building.
It’s been a painful trophy for Accelerate Property Fund, adding to the overall illusions of grandeur that got the fund into huge trouble in the first place. COVID was of course a disaster for office property, so owning the most impressive building of the lot just meant having bigger headaches. Accelerate is focused on turning the Fourways Mall around, so they can’t afford to have any other risks right now.
After making it pretty clear recently that the “For Sale” sign was outside the door of Portside, the Accelerate has now agreed a deal with Cavaleros Group Holdings for Accelerate’s proportionate ownership in the office tower. This means floors 9 – 18, along with 623 parking bays and the common areas. I checked the last annual report and based on the GLA that I found, this means a complete exit for Accelerate from the building.
The price? R580 million. The last valuation? R609 million. That’s a discount to net asset value (NAV) of just 4.7%. Meanwhile, Accelerate is trading at R0.50 per share and the NAV per share as at September 2024 was R2.60. Clearly, the discount achieved on the Portside sale is actually a massive premium to what the share price is implying.
This stock is looking more interesting by the day. They just need to keep the bankers at bay while continuing to deliver improvements at Fourways Mall.
Life Healthcare shareholders love the LMI deal (JSE: LHC)
You won’t often seen an approval rate this high
Life Healthcare recently announced a deal to sell Life Molecular Imaging (LMI) to Lantheus Holdings. The back story is that Lantheus is the counterparty to the sub-licensing agreement linked to LMI that was announced in mid-2024. During the due diligence process, Lantheus liked the asset so much that they wanted to buy the whole thing!
It’s an elegant deal for Life Healthcare. They expect to receive net proceeds of around R3.7 billion, most of which will hopefully be paid to shareholders as a special distribution within the next year. Importantly, they retain upside exposure to the LMI products, based on an earnout linked to US and global sales. The global rollout is therefore a pressure point for the Lantheus balance sheet rather than the Life Healthcare balance sheet, with Life still able to take a clip of the future economics.
I’m therefore not surprised to see that the deal got nearly unanimous approval at the Life Healthcare shareholders meeting. It’s a clever deal that has supported a 29% increase in the share price over the past 12 months.
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