Photo by: Bloomberg
JSE-listed real estate investment trust Redefine Properties has secured its R14-billion takeover of Fountainhead Property Trust’s property portfolio.
The company already owned Fountainhead’s management company and held a 66% equity interest in Fountainhead, but would now acquire all Fountainhead’s assets, including the group’s entire property portfolio, comprising 44 properties, in exchange for 85 new Redefine shares for every 100 Fountainhead units, as well as the assumption of Fountainhead’s liabilities.
“We are thrilled with the outcome of today’s meeting which, for us, completes a process we began more than three years ago. 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,” said Redefine CEO Andrew Konig.
For Fountainhead investors, the transaction would provide exposure to a diverse portfolio of local and international property assets valued at almost R60-billion, 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 meant 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,” Konig added.