Growthpoint still wants Fountainhead
Growthpoint Properties said on Tuesday (12 March) it remained committed to buying Fountainhead Property Trust's R10.3bn portfolio‚ and claimed that Redefine Properties' assertion that its bid would fail was "without merit".
Growthpoint and Redefine‚ South Africa's two largest property groups‚ have been competing for Fountainhead's assets‚ after Redefine made the first move in August last year when it bought the trust's management company for R660m. Growthpoint made its first offer in October.
In a surprise move on Monday (11 March)‚ Redefine withdrew its offer for the trust's assets‚ citing negative effects on its ability to run Fountainhead's business due to delays and uncertainties.
Redefine also intended blocking Growthpoint Properties' higher offer after acquiring about 18% of Fountainhead's units - making it the largest Fountainhead unitholder.
In addition‚ Redefine said it intended to acquire up to another 15% of the Fountainhead units in issue‚ and in an update on Tuesday (12 March) said it had received acceptances in excess of 175m Fountainhead units on its "first come first served offer".
The additional 175m units increase Redefine's holding in Fountainhead to about 33%.
Furthermore‚ Redefine was "considering whether or not to increase the number of Fountainhead units it is willing to acquire in order to accommodate some of the excess demand".
Meanwhile‚ Growthpoint said it "remains committed" to engaging with the independent committee of Fountainhead's management company to progress its offer "in order to afford all Fountainhead unitholders the opportunity to consider its offer".
Growthpoint said its offer remained at a "considerable premium" to the current Fountainhead price per unit and was superior to Redefine's offer.
In a statement issued by Growthpoint, the company said: "Redefine continues to highlight the negative impact that uncertainty is having on the assets and day-to-day business of Fountainhead. However, Growthpoint wishes to emphasise that Fountainhead's management company has the responsibility for managing the day-to-day business of Fountainhead for which it receives gross fees in excess of R60m a year,"
Growthpoint said negotiations with tenants‚ proposed redevelopments and decisions on capital expenditure were day-to-day operational matters "that should in no way be impacted by the Growthpoint offer".
The company added that its own independent legal advice contradicted Redefine's views on certain legal matters‚ and "Redefine's abrupt change in strategy confirms its own lack of confidence in these views and the prospects of success of the arguments it has so far sought to advance".
Growthpoint said Redefine's actions were preventing Fountainhead and all its unitholders from being able to consider its offer‚ "which has significant financial benefit for them".
Source: I-Net Bridge
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