Johannesburg - Redefine Properties, which was involved in a bitter battle with rival listed property company Growthpoint for the assets of Fountainhead Property Trust, proposes to increase its stake in Fountainhead.
Redefine, which is already the largest single holder of Fountainhead participatory units, said yesterday that it intended to grow its Fountainhead holding and proposed to acquire up to 250 million more units in exchange for Hyprop units held by Redefine.
Growthpoint chief executive Norbert Sasse confirmed in August, when it published its annual results, that “the book is closed and it has already called it a day” in its bid to acquire the assets of Fountainhead.
Marc Wainer, Redefine’s chief executive, said yesterday that it already had a 49.6 percent holding in Fountainhead and if it got the full amount it proposed acquiring, which was highly unlikely, it would raise its stake to 70 percent.
Wainer said many of the major Fountainhead shareholders were pension funds and unit trusts, which had limits on their holdings of a single stock. He believed some of these funds might have reached the maximum limit of Hyprop units they could hold.
Redefine proposes to acquire the Fountainhead units on a swap ratio of 110 Hyprop units for every 1 000 Fountainhead units on a first come, first served basis .
In terms of Companies Act requirements, Redefine will acquire a minimum of 135 000 units from any single vendor of Fountainhead units, and thereafter in multiples of 1 000 units.
The offer opened yesterday and will remain so either until the close of business on Friday, October 18, or earlier if Redefine notifies the market of the withdrawal of its proposal.
Wainer said the aim of the offer was twofold: to increase Redefine’s shareholding in Fountainhead and ultimately to dispose of its Hyprop stake.
Any remaining Hyprop shares it held following this offer would be sold for cash.
Wainer confirmed it was Redefine’s ultimate objective to have 100 percent of Fountainhead’s assets on its balance sheet but did not have any timescale in which it was seeking to achieve this.
He said the provisions of the Companies Act meant Redefine was limited to making offers for 135 000 shares or more but it would at some stage like to make offers to smaller shareholders.
Wainer did not believe there would be any future fights with Growthpoint over Fountainhead’s assets, stressing that with a 49.6 percent holding it could oppose any proposal.
He added that increasing Redefine’s holding in Fountainhead would further align the interests between Redefine and Fountainhead unitholders.
Growthpoint and Redefine were until earlier this year at loggerheads in their battle to acquire Fountainhead’s assets. Most of it focused on the fact that Growthpoint made an offer for Fountainhead that excluded Fountainhead’s management company.
Redefine paid Standard Bank Properties and Liberty Holdings R660 million last year to acquire Fountainhead’s management company and warned of litigation if Fountainhead’s assets were sold and it did not receive any compensation for the acquisition costs of the management company.
Redefine units closed unchanged at R9.80 yesterday, while Fountainhead rose 0.25 percent to R7.89. Hyprop declined 1.77 percent to R72.56. - Business Report