Growthpoint will acquire around 30.3 percent of CapReg in cash at 33pence per share, and then subscribe to acquire a further 311.45 million shares. File Photo: IOL
CAPE TOWN – UK Retail property firm Capital & Regional’s (CapReg) share price rose as much as 24.13 percent to R4.99 at the close of the JSE on Thursday after it agreed to terms for an investment by South Africa's largest listed real estate investment trust, Growthpoint.

Growthpoint will acquire around 30.3 percent of CapReg in cash at 33pence (R6.30) per share, and then subscribe to acquire a further 311.45 million shares, which will take its ownership to 51.2 percent.

CapReg chairperson Hugh Scott-Barrett said in a statement that they believed the deal provided "a transformational catalyst for the future to the benefit of all shareholders”.

Growthpoint chairperson Francois Marais said: “Growthpoint views its investment (in CapReg) as an exciting next step in the execution of its internationalisation strategy.”

The offer price represents a premium of about 100 percent to the price per CapReg share of 16.5p on September 10, the last day before GrowthPoint’s offer was announced.

It also represented a 124 percent premium to the average CapReg share price for the three months to September 10.

Scott-Barrett said that the partial offer would give shareholders an opportunity to realise about 30.3 percent of their shareholding at 33p in cash and potentially sell a larger proportion of their shares, depending on the level of acceptances.

The share subscription would raise about £77.9 million and an agreement had been reached with Growthpoint that at least £50m would be used to reduce CapReg’s debt, with the balance to be used for capital expenditure.

This would provide additional balance sheet flexibility and allow an acceleration of capital expenditure projects.

Growthpoint typically seeks opportunities where it can invest in companies through subscriptions for new shares, providing fresh capital to such companies to take advantage of growth opportunities in their markets.

Since Growthpoint started this approach, it has provided about £1 billion of capital to investee companies and their management teams.

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