Redefine Properties, a South African real estate investment trust, has secured its takeover of Fountainhead Property Trust’s property portfolio. The deal received overwhelming approval by Fountainhead unitholders eligible to vote (Redefine as a related party to the transaction was precluded from voting its shares) at a general meeting held in Rosebank.
Redefine, which owns Fountainhead’s management company and holds a 66% equity interest in Fountainhead, will acquire all of Fountainhead’s assets including the entire Fountainhead property portfolio in exchange for 85 new Redefine shares for every 100 Fountainhead units plus the assumption of Fountainhead’s liabilities. Based on Redefine’s current share price, the transaction places a value of just under R14bn, on Fountainhead’s property portfolio, comprising 44 properties, of which 70% by value are prime retail assets.
“We are thrilled with the outcome of today’s meeting which for us completes a process we began more than three years ago,” said Redefine CEO Andrew Konig. “The acquisition of this portfolio positions us to manage our balance sheet and domestic asset allocation more efficiently to provide our shareholders with the added benefit of increased direct exposure to retail real estate assets.”
For Fountainhead investors, the transaction will provide exposure to a diverse portfolio of local and international property assets valued at approximately R60bn, access to a broader funding base and the benefits of economies of scale and cost savings thanks to synergies between both property portfolios.
For Redefine shareholders, the transaction means portfolio growth, quality improvement, structural simplification and diversification through the added benefit of increased exposure to retail property.
“We are greatly encouraged by the shareholder support we received from Redefine and Fountainheads’ shareholders and are excited to be implementing this acquisition, which to a large extent, completes Redefine’s property portfolio restructure which began towards the end of 2011,” concludes Konig.
