Insurance and investment giant Old Mutual has raised a ”Chinese wall” over the bidding process associated with what could be Africa’s largest property sale — the V&A Waterfront — for which multibillion-rand bids close on Monday.
This is because of possible accusations of a conflict of interests.
Old Mutual Properties is understood to be bidding together with the Public Investment Corporation, which oversees state pension funds. At the same time, Old Mutual has been appointed to undertake the valuation process on behalf of Transnet and its pension funds, which currently own the prime project — only 55% of which has been developed.
Complicating the picture is the fact that Transnet chairperson Bulelani Ngcuka — husband of Deputy President Phumzile Mlambo-Ngcuka — also has an interest in Old Mutual as part of a black empowerment consortium and in Investec (IPG) Growthpoint, another anticipated bidder.
Bid documents were provided at a cost of R50 000, which was not returnable. About 80 potential bidders are understood to have bought the documents.
Others reliably understood to be in the field include a Canadian pension fund, a consortium put together by Goldman Sachs, Zenprop and the Pretoria company Atterbury.
It has been reliably learned that other parties putting in bids are Ellerine brothers and a new international consortium called Fabuprop, involving Industrial Development Corporation chairperson and former Vodacom chair Wendy Luhabe and Property Partners boss Stuart Chait, formerly of MvelaProp.
It could not be confirmed that Sanlam Property and Hosken Consolidated Investments were part of the bid process, but rumours are rife in the market that they are in the running. Hosken leaders Johnny Copelyn and Marcel Golding could not be reached for comment.
Transnet chief executive Maria Ramos, flanked by Transnet chair Bulelani Ngcuka, announced the sale in May. Old Mutual then carried out the valuation procedure of the prime mixed-use property, which receives about 22-million visitors a year.
Old Mutual’s valuation manager, Trevor King, emphasised that he was ”bound by fairly serious confidentiality” and was not involved at all in the sales process. ”We have merely done a valuation,” he said, noting that Old Mutual Properties had been involved with the V&A project since 1997. He would not comment on the detail of the valuation or when it would be released.
Asked about details of the Old Mutual valuation and who had submitted bids, Investec’s Dave Tew, who is running the sales process on behalf of the Waterfront, said he could not say anything.
A senior Old Mutual executive confirmed that a confidentiality agreement precluded investment teams from having ”any contact” with the valuation team or their information. Within the company, this is described as a ”Chinese wall”.
When the announcement of the sale of a more than 70% share of the Waterfront was made in May, Ramos would not be drawn on what sale price could be expected. But it is now expected to be in the region of at least R6-billion.
Ramos then reported that potential buyers would be evaluated according to a list of 100 points, of which up to 85 would be for the actual purchase price, up to 10 for black economic empowerment and up to five for the retention of the 750 full-time employees of the V&A Waterfront.
Potential buyers would lose one of the 85 points coming from the qualifying purchase price for every R25-million below the highest price offered.
Ramos stressed that a single buyer would be preferred, and that offers would be considered only if they were for at least a 25% interest. According to BuaNews, the government news service, the sale is expected to be concluded by September.