Roy Cokayne
Redefine, the listed property loan stock company, has reached agreement with Standard Bank Properties and Liberty Holdings to acquire the management company of Fountainhead Property Trust for R660 million.
The transaction is a precursor to plans by Redefine to make an offer to acquire the R10 billion assets of Fountainhead, also a listed property company, and Redefine exiting from its 30 percent shareholding in Hyprop.
Redefine’s planned exit from its Hyprop shareholding follows it making a mandatory offer in 2010 to acquire all the linked units in Hyprop it did not already own at R50 a combined unit. This offer was triggered by Redefine’s acquisition of 19.68 million Hyprop combined units from Coronation Asset Management. However, the offer failed after Hyprop’s board recommended unitholders reject it because it was “not fair”.
Redefine’s shareholding in Hyprop subsequently reduced from 45.7 percent to 29.4 percent although the value of its investment was unchanged when Hyprop last year acquired Attfund Retail for R9bn.
Redefine chief executive Marc Wainer stressed on Friday that the only acquisition Redefine had concluded at this stage involved the management company of Fountainhead.
Prior to any offer being made for the Fountainhead assets, Redefine would have to conduct a detailed due diligence, he said.
The acquisition of the management company of Fountainhead is also still conditional on all regulatory approvals, including from the Competition Commission, Financial Services Board and the SA Reserve Bank.
Wainer said it viewed the acquisition of the management company as the key to Redefine being able to acquire the R10bn of assets of Fountainhead.
He said Redefine would formulate an offer for the Fountainhead assets after the required regulatory approvals were obtained for acquiring the management company.
The acquisition of Fountainhead’s assets would require the support of Redefine and Fountainhead unit holders but also be conditional on a due diligence investigation plus all the required board, trustee and regulatory approvals.
Redefine shares rose 0.38 percent to R7.99 on Friday.