11th Sep 2019 07:59
(Alliance News) - Johannesburg-listed real estate investment trust Growthpoint Properties Ltd on Wednesday confirmed that it is in talks with Capital & Regional PLC to acquire a majority stake through a partial offer.
The offer would be a combination of cash for Capital & Regional shares, and an injection of capital through a subscription for new shares in the company.
Growthpoint has until 1700 BST on October 9 to make a firm offer for the Capital & Regional stake, with both companies stressing that there was no guarantee that any offer will be made.
Both companies on Wednesday also released earnings, with Growthpoint for its recently-ended financial year, and dual-listed Capital & Regional for the first half of 2019.
For the year to the end of June, Growthpoint reported a pretax profit of ZAR7.52 billion, down 12% from ZAR8.57 billion the year before, despite revenue growing by 3.8% to ZAR11.55 billion from ZAR10.93 billion.
Profit was hit by a lower gain on fair value adjustments of ZAR870 million in the recently-ended year, compared to ZAR1.47 billion the year before, as well as higher finance costs of ZAR3.12 billion from ZAR2.57 billion.
Headline earnings per share dipped to 158.10 rand cents from 159.84 cents, and well below consensus expectations of 217.4 cents.
Revenue growth, meanwhile, was fostered by 2.2% growth in Growthpoint's operations in South Africa, while Growthpoint Properties Australia - in which the group holds a 66% stake - reported a 9.0% rise in revenue.
Net asset value per share as at June 30 was down 0.7% at 2,539 rand cents from 2,556 cents the same date the year before.
Growthpoint declared a final dividend of 112.6 cents per share, bringing the total payout to 218.1 cents, up 4.6% from 208.6 cents.
Meanwhile, Capital & Regional reported a pretax loss of GBP55.4 million for the six months to the end of June, compared to a profit of GBP6.7 million the year before.
This was on net rental income that dipped by 3.7% to GBP25.2 million from GBP26.0 million, and revenue that declined 0.6% to GBP45.2 million from GBP45.5 million.
Net asset value as at June 30 was down 23% at 55 pence from 66p the same date the prior year, as Capital & Regional's portfolio value fell by 6.8% to GBP797.3 million from GBP855.2 million the prior year.
Due to the talks between it and Growthpoint Properties, Capital & Regional has deferred deciding on the level of its interim dividend until discussions are concluded. Capital & Regional declared a payout of 1.82 pence per share the prior year.
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Capital & Regional