Redefine maintains offer on the table for Fountainhead investors
Marc Wainer, CEO of Redefine Properties
Redefine Properties has confirmed that its indicative offer to acquire the property assets of Fountainhead Property Trust remains on the table, unchanged, notwithstanding yesterday’s counter offer for this portfolio by Growthpoint Properties.
Redefine detailed its offer for the portfolio, which includes several prime retail properties, on September 28, 2012 and its share swap offer remains unaltered at three Hyprop units and 62.5 Redefine units for every 100 Fountainhead units.
The offer followed Redefine’s acquisition of Fountainhead’s management company for R660 million earlier this year.
Redefine CEO Marc Wainer says: “We believe our offer is the right one; for Redefine investors, Fountainhead investors, and for those invested in both. But the decision as to whether or not to accept Redefine’s offer lies with Fountainhead’s investors”.
Wainer notes that Fountainhead’s annual results, prepared in the main by its previous management, are scheduled for release next week on 1 November 2012, and will hopefully provide the market guidance needed to properly assess Redefine’s offer and to assess Growthpoint Properties’ offer for Fountainhead’s property assets, which Growthpoint based on the market consensus forecasts.
Wainer adds: “Once guidance in respect of Fountainhead’s forward distributions is published Redefine will re-engage with Fountainhead unitholders to obtain confirmation on whether or not they would still like the opportunity to consider Redefine’s offer. If the response is positive Redefine will seek to procure that the offer is put to Fountainhead unitholders. If not Redefine’s intention is to withdraw its offer and continue to manage the Fountainhead portfolio in the best interests of Fountainhead unitholders.”
Wainer however notes that even with the benefit of the Fountainhead guidance the offers are not comparable, as Growthpoint does not give any indication of how Fountainhead Manco would be compensated for the loss of its asset management income if its proposal is implemented.
“In the announcement of Redefine’s offer, no separate compensation was expressly detailed as, implicit in the offer, is the fact that Redefine is compensated for this loss by the equivalent saving in the asset management fee on the properties that it is acquiring,” says Wainer. “However, any offer that seeks to gain the benefit of the savings in assets management fees payable to Fountainhead Manco without providing for adequate compensation is simply unacceptable.”
“We remain resolved that our offer is a good and fair deal for Fountainhead and a good deal for Redefine,” says Wainer.
