Growthpoint Properties, South Africa’s largest primary JSE-listed REIT, has announced a significant move to streamline its operations.
The company has conditionally agreed to sell its entire 69% shareholding in Capital & Regional (C&R) to NewRiver REIT.
C&R, which is dual-listed on the London Stock Exchange and the Johannesburg Stock Exchange, primarily invests in UK community-focused shopping centres.
This strategic disposal aligns with Growthpoint’s goal to simplify its business and optimize its international investments.
The transaction is part of a broader deal where NewRiver REIT has offered to buy all issued and to-be-issued C&R shares for a total of GBP 147 million, or 62.5 pence per share. Growthpoint stands to receive GBP 101.4 million from this deal.
In this cash and share transaction, each C&R share will be exchanged for 31.25 pence in cash and 0.41946 new NewRiver shares.
For Growthpoint, this translates to approximately GBP 50.7 million in cash and 67.4 million new NewRiver shares, giving it a 14% stake in NewRiver post-transaction.
Norbert Sasse, Group CEO of Growthpoint Properties, said his move is part of the group's broader strategy to simplify the business and optimise its international portfolio.
The decision to sell follows unsolicited expressions of interest in C&R, with NewRiver’s offer representing a 21% premium to C&R’s closing share price on May 23, 2024.
Growthpoint will also be entitled to the interim dividend declared by C&R for the six-month period ending June 30, 2024, and a further dividend upon completion of the transaction.
The cash proceeds will be used to strengthen Growthpoint’s balance sheet and pursue new investment opportunities.
The transaction is subject to the approval of C&R shareholders, with Growthpoint’s approval alone accounting for nearly 69% of the required 75%.
Upon completion, C&R will be delisted, and 40.6% of Growthpoint’s property assets by book value will be located offshore.
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