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Update on corporate action and renewal of cautionary announcement
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 No. 1983/003324/06)
Share Code: FPT
ISIN Code: ZAE000097416
("Fountainhead”)
Update on corporate action and renewal of cautionary announcement
1. Update on the Growthpoint proposal
Unitholders of Fountainhead (“Unitholders”) are referred to the
cautionary announcement released on the Securities Exchange News
Service ("SENS") on 15 November 2012 by Growthpoint Properties
Limited ("Growthpoint"), which sets out the revised pricing
mechanism relating to the unsolicited proposal received by the
directors of Fountainhead Property Trust Management Limited
(“Fountainhead Manco”) from Growthpoint on 23 October 2012 to
acquire all of the assets of Fountainhead in return for a
combination of cash and Growthpoint units (“the Growthpoint
proposal”).
The Growthpoint proposal remains unchanged at an offer ratio of 35
Growthpoint units for every 100 Fountainhead units, but may be
adjusted pursuant to Growthpoint’s proposed due diligence of
Fountainhead on the basis set out below.
To the extent that, during the proposed due diligence process,
Growthpoint determines that the sustainable distribution per
Fountainhead unit for the year ending 30 September 2013 is likely to
be less than the published forecast of 55.83 cents per unit,
Growthpoint will adjust the offer ratio downwards by 0.313
Growthpoint units per 100 Fountainhead units for every 0.5 cents by
which Growthpoint’s determination of the likely Fountainhead
distribution is less than the published forecast. Similarly, the
offer ratio will be adjusted downwards by 0.292 Growthpoint units
per 100 Fountainhead units for every 0.5 cents by which
Growthpoint’s determination of the likely sustainable distribution
per Fountainhead unit for the year ending 30 September 2014 is less
than the published forecast of 59.85 cents per Fountainhead unit,
for reasons arising subsequent to the year ending 30 September 2013.
To the extent that concerns are identified by Growthpoint during the
proposed due diligence investigation which Growthpoint determines
are likely to have an impact on value of more than 5% (“NAV
difference”) of the reported tangible net asset value of R8,063bn as
at 30 September 2012, the offer ratio will be adjusted downwards by
0.313 Growthpoint units per 100 Fountainhead units for every R92m of
the total Rand value of the NAV difference.
2. Update on the Redefine proposal
Unitholders are further referred to the Fountainhead cautionary
announcement released on SENS on 1 October 2012 relating to the
unsolicited proposal received from Redefine Properties Limited
(“Redefine”) to acquire the majority of the assets of Fountainhead
in return for a combination of Redefine and Hyprop Limited units
(“the Redefine proposal”) (jointly, the Growthpoint proposal and the
Redefine proposal are referred to as “the Proposals”).
The independent committee of the board of directors of Fountainhead
Manco established to evaluate the Proposals (“the Independent
Committee”) continues to engage with Redefine in relation to the
Redefine proposal. Redefine has prepared and circulated to the
Independent Committee a draft sale agreement, setting out the terms
and conditions of the Redefine proposal. The Independent Committee
has engaged with Redefine in relation to this draft sale agreement,
and is currently awaiting a revised draft of the sale agreement from
Redefine reflecting the outcome of that engagement.
In addition, Redefine has, in written communication to the Chairman
of the board of directors of Fountainhead Manco, raised a number of
issues and concerns in relation to the Growthpoint proposal. The
Independent Committee has taken advice in relation to all the
matters raised and the Chairman of the board of directors of
Fountainhead Manco has responded to Redefine.
3. Continuing cautionary announcement
As set out in the cautionary announcement of 1 October 2012, the
Independent Committee is in the process of considering the
Proposals. There remain a number of unresolved regulatory and
commercial issues to be finalised before Fountainhead Manco can
revert to Unitholders regarding the relative merits of the
Proposals.
Unitholders are accordingly advised to continue to exercise caution
when trading in their Fountainhead units until a further
announcement is made.
15 November 2012
Merchant bank and transaction sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
Legal Advisor
Bowman Gilfillan Inc.
Date: 15/11/2012 08:39:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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