Shareholders to give the green light for Growthpoint-Acucap acquisition

Growthpoint Properties CEO, Norbert Sasse says we are pleased to have finalised the implementation agreement with Acucap and to move forward together with a clear roadmap.

Growthpoint Properties and Acucap Properties today reached agreement regarding terms and conditions of potential offer — in which Growthpoint is to acquire shares in Acucap that it doesn’t already own.

The deal comes after Growthpoint failed to acquire R12 billion Fountainhead Property Trust’s retail portfolio after losing a long-running takeover battle with competitor Redefine Properties. 

Growthpoint in April built up a 34.7% stake in Acucap, which has a large portfolio of retail assets and 15,6% of Sycom.

Acucap currently holds 83.4% of Sycom and 100% of Sycom Property Fund Managers, the fund manager of Sycom Property Fund.

In August, Acucap and Growthpoint formally advised the market they were engaged in discussions.

The preconditions in the implementation agreement, if met, will progress Growthpoint’s potential offer to a scheme of arrangement that would see Acucap become a wholly-owned subsidiary of Growthpoint. In addition, the scheme would also result in Growthpoint owning Sycom Property Fund Managers Limited and, directly or indirectly, some 99% of Sycom units.

The scheme of arrangement proposes a share exchange of 1.97 Growthpoint shares for one Acucap share. This equates to approximately R49.17 per Acucap share and represents a premium of 8% on the Acucap 30-day clean volume weighted average share price on 11 November 2014. In addition, if the scheme is implemented, Growthpoint will also match this share exchange rate with the vendors of the pre-acquisition interests it already holds in Acucap and Sycom.

The values of the deal is at about R8 billion, based on SA Commercial Prop News calculations.

The preconditions in the implementation agreement state that an independent expert must conclude that the terms of the scheme are fair and reasonable for Acucap shareholders, other than Growthpoint; and that Growthpoint must obtain the requisite approval from its shareholders to place sufficient Growthpoint shares under the control of its directors to settle the scheme considerations.

Acucap’s Independent Board, comprising only its independent non-executive directors, has appointed RMB’s Corporate Finance Division as its independent expert, and will evaluate the terms of the scheme. Growthpoint has advised it will post a circular to its shareholders in the next few days regarding placing the requisite shares under the control of the Directors.

When the preconditions are met, the implementation agreement automatically becomes notification by Growthpoint of its firm intention to make an offer to Acucap shareholders and Acucap’s Board of Directors will propose the scheme to Acucap shareholders, other than Growthpoint. The Scheme Circular will include an opinion from the Independent Expert as well as the views of Acucap’s Independent Board. Then the requisite majority of Acucap shareholders must approve it at a general meeting. Approvals will also be required from the JSE, the Take-over Regulation Panel, the Competition Tribunal and any other relevant regulatory authorities.

Based on the indicative dates agreed upon by the companies, the preconditions could be met as early as mid-December 2014. Then, should the proposed offer become firm and be accepted by shareholders and receive the other requisite approvals, the transaction could be effective from 1 March 2015 and the scheme implemented by 30 March 2015, at which point Acucap could be delisted from the JSE.

Growthpoint shares fell as much as 1.1% and traded 0.5% lower to R26.20 by 11:17 a.m. in Johannesburg. Acucap shares gained 0.3% to R50.85, compared with R48.07 valued by the deal.