Redefine, Fountainhead to merge
Fountainhead Property Trust, which is currently managed and 65.9% owned by Redefine Properties, has agreed to sell all of its assets, including the Fountainhead property portfolio to Redefine, in exchange for 82 Redefine shares for every 100 Fountainhead units held.
Redefine would assume all of Fountainhead’s liabilities, including its interest-bearing debt.
Redefine’s board, as well as the independent board committee of Fountainhead management company Fountainhead Property Trust Managers, had agreed that the merger of Redefine and Fountainhead made strategic sense.
“We welcome this agreement and are pleased to be taking this transaction forward,” Redefine CEO Marc Wainer stated.
For Fountainhead investors, the transaction would provide exposure to a diverse portfolio of property assets valued at R44.5-billion, with a focused portfolio strategy, access to lower costs of capital and the benefits of economies of scale and cost savings as a result of the synergies between the two property portfolios.
It would also unlock greater ease of trade through the more liquid Redefine shares.
Meanwhile, for Redefine shareholders, the transaction meant strategic portfolio growth and diversification through the added benefit of increased exposure to retail property.
The Fountainhead property portfolio, valued at more than R12-billion, comprised 66 properties covering 935 355 m2 of lettable space.
The transaction, which would become effective on September 1, was subject to the fulfilment of conditions precedent, including approvals from Fountainhead unit holders and Redefine shareholders, as well as approval by the Financial Services Board.
Once the transaction was finalised, Fountainhead would be delisted from the JSE.
“For Redefine, this is another important milestone in expanding the local property portfolio and in aligning the interests of investors,” Wainer said.
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