Redefine gets go ahead for Fountainhead acquisition
Redefine Properties announced today that it had received Competition Tribunal approval for the acquisition of the Fountainhead Management Company and the proposed acquisition of the assets of Fountainhead.
As all regulatory approvals have been received‚ with effect from 1 August 2012‚ Redefine will take immediate control of the Fountainhead Management Company and will simultaneously undertake a due diligence investigation into the affairs of the Trust. Once the due diligence has been completed‚ Redefine will make a decision as to whether it intends making an offer for the underlying assets.
The price which will be offered to Fountainhead unit holders will comprise a combination of Hyprop and Redefine units.
Redefine CEO‚ Marc Wainer‚ commentened on Thursday: “Since the initial announcement was made the prices of all three counters have increased substantially resulting in Fountainhead trading at a significant premium to its net asset value.
"Notwithstanding the fact that this is intended as a scrip for scrip transaction‚ we still have to be satisfied that there is value for us in the underlying assets at the current price and there is sufficient growth potential to justify the premium to NAV. We will only be in a position to assess this once the due diligence investigations have been completed.
“There is also a considerable amount of capital which will have to be spent on some of the existing centres defensively and this is also a factor which will have to be taken into account when the assets to be acquired are priced.”
Redefine remains convinced that the Fountainhead assets will complement those of Redefine and increase its direct exposure to quality retail assets while at the same time exiting its indirect stake in retail via Hyprop.
