Growthpoint Properties drops offer for Fountainhead assets

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Sector heavyweights, Marc Wainer CEO at Redefine and Norbert Sasse CEO at Growthpoint have been competing for control of Fountainhead's R10 billion portfolio since last year. Sector heavyweights, Marc Wainer CEO at Redefine and Norbert Sasse CEO at Growthpoint have been competing for control of Fountainhead's R10 billion portfolio since last year.

JSE-listed Growthpoint Properties today announced it is withdrawing an all-share spirited bid offer to acquire Fountainhead first tabled in October, but said it would refer the JSE’s ruling on the matter to the Financial services Board.

The news sent Fountainhead stock down more than 4%.

Last month‚ the JSE declined Growthpoint’s request for a ruling that Redefine Properties (RDF) be precluded from voting on all resolutions relating to Growthpoint’s bid for Fountainhead’s R10bn portfolio.

Redefine Properties Ltd. (RDF), the country’s second-largest real estate company and Growthpoint, the country’s biggest property company by market value, were in a bidding war for Fountainhead’s assets since last October‚ until Redefine withdrew its offer in March and acquired a 46% stake in Fountainhead, effectively blocking Growthpoint's bid.

Redefine bought Fountainhead’s management company for R660m last August before opening talks on the trust’s assets.

“Growthpoint will continue to engage with the regulators and major independent unitholders of Fountainhead and will reassess its alternatives … when it has greater clarity as to the definitive position of‚ in particular‚ the FSB‚” it said on Thursday.

At 11.20am‚ the Fountainhead was down 4.26% to R8.55‚ while Growthpoint fell 0.37% to R26.75.

“The decline is related to Growthpoint withdrawing its offer,” Leon Allison, property equity analyst at Macquarie First South Securities, said in a phone interview with Bloomberg. “Some Fountainhead shareholders might be disappointed the deal didn’t go through.”

Investors in Fountainhead “have been denied the opportunity to consider and vote on the Growthpoint offer, which would have entailed a premium of 1.13 billion rand at the May 28 closing price,” Growthpoint said in the statement.

“They had nowhere to go with the bid,” Redefine’s Chief Executive Officer Marc Wainer said in a phone interview today. “They should have withdrawn the bid weeks ago.”

Growthpoint’s withdrawal brings “more certainty” regarding the companies involved in the three-way battle, Macquarie’s Allison said. “That’s good from an investor’s point of view.”

Read more on:

Growthpoint Properties  |  Redefine Properties  |  Marc Wainer  |  Fountainhead Property Trust  |  Mergers and Acquisitions  |  Norbert Sasse