Redefine exempted from JSE’s ruling over Fountainhead bidding war

Marc Wainer, CEO of Redefine Properties.

Redefine Properties on Friday said that the JSE had confirmed in writing that it had not found breaches of its listing requirements in relation to the battle for Fountainhead Property Trust’s portfolio.

The ruling is likely to be a blow to Growthpoint Properties’ ambitions to acquire Fountainhead’s R10bn portfolio.

Growthpoint had sought a ruling in its favour which would have allowed it to reopen negotiations to acquire the trust’s assets.

Growthpoint and Redefine — which owns Fountainhead’s management company — were entangled in a bidding war for Fountainhead’s retail-dominated portfolio until Redefine withdrew its offer in March and Growthpoint withdrew last month.

Growthpoint withdrew after a decision by Fountainhead board’s independent committee to cease engagement, although Growthpoint referred a number of claims to the Financial Services Board (FSB) and the JSE, including that Redefine be precluded from voting its shares in a unitholder vote. Redefine said on Friday that following an investigation into Growthpoint’s "unfounded allegations", the JSE had confirmed in writing "that they have found no breaches by Redefine of the JSE listings requirements".

Redefine CEO Marc Wainer said Redefine "always said there was nothing to answer for, and that just vindicates it".

In March, Redefine withdrew its offer and instead acquired a 46% stake in Fountainhead, citing negative effects on its ability to run Fountainhead’s business due to delays and uncertainty, and in line with its intentions to acquire a "meaningful stake" if it did not acquire the assets.

Redefine’s significant stake would have made it difficult for Growthpoint to win a unitholder vote to secure the assets, which subsequently led the Fountainhead board’s independent committee to terminate its engagement with Growthpoint.

While Growthpoint formally withdrew its offer last month, it requested that the FSB and JSE probe claims, including that Redefine’s initial acquisition of Fountainhead units should be investigated. Growthpoint has said a ruling, especially that Redefine be precluded from voting its shares, would allow it to re-engage Fountainhead and pursue the acquisition. Apart from referring the matter to the FSB, Growthpoint has not ruled out legal action.

However, after withdrawing the offer, Growthpoint executive director Estienne de Klerk said last month the deal was "certainly looking more difficult to do".