Top Property fund Management Company seals R14bn deal to buy Fountainhead's assets
Category Property Fund News
Redefine Properties, SA's second-largest real estate investment trust, has secured its takeover of Fountainhead Property Trust's property portfolio. Two years ago‚ property heavyweights, Redefine Properties and Growthpoint Properties were entangled in a protracted bidding war for Fountainhead’s retail-dominated portfolio. This became the biggest property bidding battle ever recorded in South Africa’s listed property sector. Redefine emerged as the victor, but it falled short in taking the home prize last year. However, on Friday the deal received overwhelming approval by Fountainhead unitholders eligible to vote (Redefine as a related party to the transaction was precluded from voting its shares) at a general meeting held in Rosebank this morning. Redefine, which owns Fountainhead's management company and holds a 66% equity interest in Fountainhead, will acquire all of Fountainhead's assets including the entire Fountainhead property portfolio in exchange for 85 new Redefine shares for every 100 Fountainhead units plus the assumption of Fountainhead's liabilities. Based on Redefine's current share price, the transaction places a value of just under R14 billion, on Fountainhead's property portfolio, comprising 44 properties, of which 70% by value are prime retail assets. "We are thrilled with the outcome of today's meeting which for us completes a process we began more than three years ago," said Redefine CEO Andrew Konig. "The acquisition of this portfolio positions us to manage our balance sheet and domestic asset allocation more efficiently to provide our shareholders with the added benefit of increased direct exposure to retail real estate assets." The transaction will increase Redefine's exposure to retail property with a diversified portfolio of local and international property assets valued at approximately R60 billion. "We are greatly encouraged by the shareholder support we received from Redefine and Fountainheads' shareholders and are excited to be implementing this acquisition, which to a large extent, completes Redefine's property portfolio restructure which began towards the end of 2011,"concludes Konig. At 1.36pm Redefine shares were 0.71% lower at R11.17 and Fountainhead was up 0.74% to R9.49.
Author: SA Commercial Property News
