Redefine Properties Ltd. walked away from the battle to acquire Fountainhead Property Trust and instead announced plans to raise its stake in the Johannesburg-based company to about a third.
Redefine has been competing with Growthpoint Properties Ltd. for control of Fountainhead since last year. Growthpoint, South Africa’s biggest real-estate investor that owns half of the V&A Waterfront restaurant and shopping complex in Cape Town, raised its all-share offer for Fountainhead last month. “The formulation of the Growthpoint offer, and the manner in which it has been dealt with by the independent committee” at Fountainhead “has caused protracted delays and uncertainty,” Johannesburg-based Redefine said in a statement today. “As Redefine has for some time feared, the uncertainty is now having a significant detrimental impact on Fountainhead’s assets and day-to-day business.”
Redefine owns about 18 percent of Fountainhead’s shares, it said. It will offer to buy as many as 175 million more shares, which according to Fountainhead equates to a 15 percent stake.
“Redefine resolved some time ago that, if its proposal to acquire the assets of Fountainhead was not successful, it would seek to obtain a meaningful stake in Fountainhead,” Redefine said.
Redefine shares closed 0.9 percent lower at 9.79 rand. Growthpoint declined by 0.2 percent, while Fountainhead gained 0.4 percent.