Growthhpoint abandons quest for Fountainhead Property Trust

JSE property heavyweight Growthpoint Properties (GRT) has confirmed that it has abandoned its fight to acquire Fountainhead Property Trust’s (FPT’s) portfolio‚ which is valued at more than R10bn.

With acquisition opportunities few and far between in the listed property sector‚ Fountainhead’s sizeable portfolio‚ which included a number of quality assets‚ had been targeted by the JSE’s two biggest South African property companies — Growthpoint and Redefine Properties (RDF).

Growthpoint said in its annual results released on Wednesday that “the prospective transaction is no longer being pursued and the company will no longer pursue any action involving the regulators”.

Growthpoint and Redefine — which owns Fountainhead’s management company — were entangled in a bidding war for Fountainhead’s retail-dominated portfolio until Redefine withdrew its offer in March and Growthpoint withdrew in May.

Growthpoint withdrew after a decision by Fountainhead board’s independent committee to cease engagement with Growthpoint‚ although Growthpoint referred a number of claims to the Financial Services Board (FSB) and the JSE‚ including that Redefine be precluded from voting its shares in a unitholder vote.

Growthpoint had sought a ruling in its favour which would have allowed it to reopen negotiations to acquire the trust’s assets.

Redefine withdrew its offer in March and instead acquired a 46% stake in Fountainhead‚ citing negative effects on its ability to run Fountainhead’s business due to delays and uncertainty‚ and in line with its intentions to acquire a "meaningful stake" if it did not acquire the assets.

Redefine’s significant stake would have made it difficult for Growthpoint to win a unitholder vote to secure the assets‚ which subsequently led the Fountainhead board’s independent committee to terminate its engagement with Growthpoint.

Following an investigation into Growthpoint’s allegations‚ the JSE said in June it had found no breaches by Redefine of the JSE listings requirements.