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FPT - Fountainhead Property Trust - Proposed acquisition by Fountainhead
Property Trust ("Fountainhead") of the remaining 25% in Centurion Mall
Fountainhead Property Trust
A Collective Investment Scheme in property registered in terms of the Collective
Investment Schemes Control Act, No.45 of 2002 and managed by Fountainhead
Property Trust Management Limited
(Registration number 1983/003324/06)
Share code: FPT
ISIN code: ZAE000097416
("Fountainhead")
PROPOSED ACQUISITION BY FOUNTAINHEAD PROPERTY TRUST ("FOUNTAINHEAD") OF THE
REMAINING 25% IN CENTURION MALL
1. INTRODUCTION
Unitholders are advised that Fountainhead has concluded an agreement ("the
agreement") with Hyprop Investments Limited for the acquisition of the remaining
undivided share being 25% in Centurion Mall from Attfund Retail Limited ("the
acquisition") on the acquisition by Hyprop Investments Limited of all of the
shares in Attfund Retail Limited. Fountainhead currently has a 75% undivided
share in Centurion Mall the property description of which is set out in
paragraph 2.3 below.
2. THE ACQUISITION
2.1 Rationale
The acquisition is in line with Fountainhead`s strategy of acquiring quality
retail assets which are located in strong retail nodes and possess good future
growth prospects. Centurion Mall is one of Fountainhead`s best performing retail
centres and management is confident in Centurion Mall`s ability to continue
delivering good growth in income.
2.2 Consideration and terms of the agreement
The purchase price is approximately R751.5 million and is to be settled in cash
("Purchase Price"), which means that in terms of Section 9 of the Listing
Requirements ("Listings Requirements") of the JSE Limited ("JSE"), the
acquisition is regarded as a Category 2 transaction. Further to the Purchase
Price, Fountainhead will agree to any amount paid or incurred by the seller in
respect of the extension of the premises let by Pick `n Pay at the property (to
the extent that such amounts have the effect of increasing the offer
consideration payable in terms of the Hyprop/Attfund transaction).
The effective date of the acquisition will be the first day of the month
following the month in which the last of the conditions to the Attfund/Hyprop
transaction to be fulfilled is fulfilled.
2.3 Details of the property
The total rentable area of the property is 111,769sqm`s at a weighted average
gross rental of R147 per sqm as at 30 September 2010.
The weighted average rental escalation by rentable area for the property is
approximately 8.8% and the annualised property yield is approximately 7.1%.
The remaining undivided property description to be acquired is as follows:
- portion 4 of Erf 52 Verwoerdburgstad Township, Registration Division J.R.,
Province of Gauteng;
- portion 5 of Erf 51 Verwoerdburgstad Township, Registration Division J.R.,
Province of Gauteng;
- remaining extent of Erf 52 Verwoerdburgstad Township, Registration Division
J.R., Province of Gauteng;
- remaining extent of Erf 54 Verwoerdburgstad Township, Registration Division
J.R., Province of Gauteng;
- portion 5 of Erf 55 Verwoerdburgstad Township, Registration Division J.R.,
Province of Gauteng;
- portion 2 of Erf 52 Verwoerdburgstad Township, Registration Division J.R.,
Province of Gauteng;
- portion 6 of Erf 54 Verwoerdburgstad Township, Registration Division J.R.,
Province of Gauteng;
- portion 10 (portion of portion 5) Erf 52 Verwoerdburgstad Township,
Registration Division J.R., Province of Gauteng;
- erf 83 Verwoerdburgstad Township, Registration Division J.R., Province of
Gauteng;
3. FINANCIAL INFORMATION RELATING TO THE ACQUISITION
The pro forma financial effects, before and after the acquisition, on
Fountainhead`s basic earnings per unit ("EPU"), headline earnings per unit
("HEPU"), distribution per unit ("DPU") and net asset value ("NAV") per unit for
the interim period/six months ended 31 March 2011 ("the interim period") are
illustrated below.
The financial effects are the responsibility of Fountainhead`s directors, and
have been prepared for illustrative purposes only to show how the acquisition
may have affected Fountainhead`s results for the interim period.
The pro forma financial effects, due to their nature, may not fairly reflect
Fountainhead`s financial performance and position after the acquisition.
Before the After the %
acquisition acquisition Change
unaudited unaudited
(cents) (cents)
EPU 29.00 28.46 -1.85
HEPU 28.41 27.87 -1.90
DPU 27.71 27.18 -1.93
NAV per unit 676 676 0.00
Weighted number of 996.04 996.04 0.00
units in issue
(million)
Actual number of units 996.04 996.04 0.00
in issue (million
Notes and assumptions
- the amounts set out in the " Before the acquisition " column have been
extracted, without adjustment, from the unaudited interim financial
statements of Fountainhead for the interim period;
- the acquisition has been completely debt funded at a borrowing rate of 8.5
percent;
- for the purpose of calculating EPU (basic and diluted), and HEPU (basic and
diluted) and DPU, the purchase price is estimated to be R761,000,000
- for the purpose of calculating EPU (basic and diluted), and HEPU (basic and
diluted) and DPU, the acquisition was effected on 1 October 2010 using 50
percent of expected earnings of the property for the twelve months 1 July
2011 to 30 June 2012; and
- for the purpose of calculating NAV per unit, the acquisition was effected
on 31 March 2011.
4. CONDITIONS PRECEDENT
The acquisition is subject to the following conditions precedent:
- this agreement is subject to the Attfund/Hyprop transaction being
implemented by 30 November 2011 or by such later date as may be agreed by the
parties
29 July 2011
Cape Town
Sponsor
Standard Bank
Date: 29/07/2011 10:02:22 Supplied by www.sharenet.co.za
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