The independent committee established by listed property company Fountainhead, to consider rival unsolicited bids from listed Redefine and Growthpoint to acquire its assets, has decided to engage exclusively with Redefine.
However, this exclusivity will expire if a written sale agreement has not been concluded by January 31.
Attempts to obtain comment from Growthpoint were unsuccessful.
Redefine yesterday increased its offer for Fountainhead’s assets by an estimated R529 million, based on Wednesday’s closing share prices.
It increased its offer from 62.5 Redefine units and three Hyprop units for every 100 Fountainhead units held, to 56 Redefine units and 4.5 Hyprop units for every 100 Fountainhead units held.
On Wednesday Hyprop units closed at R70.29 and Redefine units closed at R9.49.
Andrew Konig, Redefine’s financial director, said it had decided to improve its offer after engaging with Fountainhead’s institutional investors and its independent board.
The revised offer was about 6 percent higher than its original proposal. Growthpoint has offered 35 Growthpoint-linked units for every 100 Fountainhead units held.
Fountainhead said yesterday a written sale agreement had to be concluded before either the Redefine or Growthpoint proposals could be put to its unitholders, but did not believe it was commercially possible to concurrently conclude separate written agreements with both Redefine and Growthpoint.
After taking all relevant considerations into account, the committee had concluded it was in the best interests of unitholders for it to engage with Redefine, with a view to concluding a written sale agreement, which could then be put to its unitholders for approval.
Fountainhead said the committee did not believe it was feasible during the period of its engagement with Redefine to continue to progress the Growthpoint proposal or any other third party proposal.
However, Fountainhead said the committee had been advised it was legally permissible for it to engage with and conclude a transaction with Growthpoint or any other third party for the sale of all or the majority of its property assets “if it was in the best interests of unitholders”.
Fountainhead said the committee was considering seeking guidance from unitholders on whether or not they would like the committee to proceed with the Growthpoint proposal or any other third party proposal if the revised Redefine proposal was not approved.
Neither the Redefine nor the Growthpoint proposals can be implemented without, among other things, the approval of the transaction and certain amendments to Fountainhead’s trust deed by the majority of its unitholders.
The reference by Fountainhead to possible litigation relates partly to the warning by Redefine chief executive Marc Wainer in October after Growthpoint had submitted its bid that Redefine would not walk away from the R660m it paid for Fountainhead’s management company and that this issue could end up in litigation.
Growthpoint chief executive Norbert Sasse said at the time it was only interested in Fountainhead’s property assets and had no use for its management company.