Growthpoint Properties said it was “puzzled” by the decision of Fountainhead’s independent committee to engage exclusively with Redefine Properties about its offer for Fountainhead’s assets because Growthpoint’s offer was “clearly still superior from a financial perspective”.

The reference by Fountainhead to the threat of litigation was also “most disturbing”, Growthpoint chief executive Norbert Sasse said on Friday.

“It’s puzzling how the independent committee of Fountainhead could conclude it was in the best interests of Fountainhead unitholders to pursue the lower offer,” he said.

Sasse said Growthpoint’s offer was about 4 percent, or R400 million, higher than the amended offer submitted by Redefine, based on the closing JSE prices on Wednesday last week for Growthpoint, Redefine and Fountainhead units.

He said Redefine’s offer was worth about R10 billion and Growthpoint’s about R10.4bn.

Redefine raised its offer for Fountainhead’s assets by about 6 percent, or an estimated R529m, on Thursday last week.

Fountainhead said it did not believe it was commercially possible to concurrently conclude written agreements with both Redefine and Growthpoint and had decided to engage exclusively with Redefine.

“In coming to this conclusion, the independent committee has been guided by, among other things, the consideration being proposed under each proposal, including Growthpoint’s proposed price adjustments, Growthpoint’s requirement for a detailed due diligence, the execution risks associated with each of the proposals (including, among other things, risks associated with any threat of litigation and possible delays in consummating a transaction as a result of such litigation), the cost to unitholders of delays and the costs of implementation of the respective proposals, and the resultant impact of all of these factors on the ongoing business,” it said.

Growthpoint wanted clarity on the litigation threat because “it has weighed heavily on the decision of Fountainhead’s board to pursue an offer that is R400m inferior”, Sasse said.

Growthpoint’s bid excluded Fountainhead’s management company, which Redefine bought earlier this year. When Growthpoint’s offer was made in October, Redefine chief executive Marc Wainer said Redefine would not walk away from the R660m it paid for the management company and this issue could end up in litigation.

Sasse said Fountainhead’s decision to sign an exclusivity agreement with Redefine appeared to be final, adding that Growthpoint could not “interdict the transaction”.