Growthpoint Properties Ltd. (GRT) will become the biggest shareholder in two property operators as South Africa’s biggest real-estate company seeks to expand its business with retail and office offerings.
As part of a 4.66 billion rand ($444 million) share-swap deal, Growthpoint will acquire 34.9 percent in Acucap Properties Ltd. (ACP) and 31.5 percent in Sycom Property Fund (SYC), the Johannesburg-based company said in a statement today. Acucap shares gained as much as 5.6 percent in Johannesburg trading while Sycom surged 11 percent. Growthpoint fell 1.9 percent.
The deal will give Growthpoint access to a portfolio of retail and office real estate worth 18.4 billion rand as the country’s fragmented property market is consolidating. South Africa’s Ascension Properties Ltd., Delta Property Fund Ltd. and Rebosis Property Fund Ltd. said in February they are considering a three-way merger, while Redefine Properties Ltd. (RDF) is in talks with Fountainhead Properties Ltd. to discuss a possible takeover.
“The past few years, we have had a listing boom and it’s natural for consolidation to happen,” Geoff Noble, a portfolio manager at Grindrod Asset Management, said in a phone interview from Durban. “The bigger the entity, the more favorable rates they have from financial institutions.”
Growthpoint is offering 1.9 of its shares for each of Acucap’s and 1.102 for each of Sycom’s. Acucap already holds 34.4 percent in Sycom, according to data compiled by Bloomberg. Growthpoint said it will issue about 191 million shares at 24.36 rand each on April 23 and May 13.
Growthpoint is exploring options to take control of the whole merged entity, Chief Executive Officer Norbert Sasse said in an e-mailed statement.
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