17th Oct 2019 07:39
(Alliance News) - Johannesburg-listed real estate investment trust Growthpoint Properties Ltd said Thursday it has reached an agreement with Capital & Regional PLC for Growthpoint to invest around GBP150.4 million for a 51% interest in the UK real estate firm.
The first part of the investment is for Growthpoint to acquire 219.8 million existing shares in Capital & Regional for 33 pence per share, at a total of GBP72.5 million.
The price is at a 55% premium to Capital & Regional's closing price in London on Wednesday of 21.25 pence. The 219.8 million shares to be acquired directly make up 30% of Capital & Regional's currently issued share capital.
The second part is for Growthpoint to subscribe for 311.5 million new Capital & Regional shares, at a price of 25p each to raise GBP77.9 million before costs for the company.
Capital & Regional said that at least GBP50 million of the proceeds raised through the subscription will go towards reducing leverage and funding capital expenditure, giving the company more room to move forward with its project pipeline.
Following the two transactions, Growthpoint will own 51% of Capital & Regional's enlarged share capital.
The deal is conditional on shareholder approval, as well as regulatory approval from the UK Financial Conduct Authority and Johannesburg Stock Exchange.
So far, Growthpoint has received irrevocable undertakings from holders of 294.8 million shares in Capital & Regional, reflecting 41% of its issued share capital, to vote in favour of the transactions at an upcoming general meeting.
"Growthpoint views its investment in Capital & Regional as an exciting next step in the execution of its internationalisation strategy. Growthpoint's strategic intent is to support the growth of Capital & Regional in the same way it has done following its investments in GOZ and GW. The result of Growthpoint's investment in GOZ and GW was a significant improvement in profitability, growth in their property portfolios, both in size and quality, and a value uplift for shareholders," said Growthpoint Chair Francois Marais.
By Dayo Laniyan; [email protected]
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