Wrap Text
Joint announcement regarding the conclusion of an agreement between Redefine, Fountainhead and FPTML and withdrawal
REDEFINE PROPERTIES LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/018591/06)
JSE share code: RDF ISIN: ZAE000143178
(Approved as a REIT by the JSE)
(“Redefine”)
FOUNTAINHEAD PROPERTY TRUST
(A collective investment scheme in property
registered in terms of the Collective Investment
Schemes Control Act, No. 45 of 2002)
(“Fountainhead”)
Managed by Fountainhead Property Trust Management Limited
(Registration number 1983/003324/06)
(“FPTML”)
JSE share code: FPT ISIN: ZAE000097416
(Approved as a REIT by the JSE)
JOINT ANNOUNCEMENT REGARDING THE CONCLUSION OF AN AGREEMENT BETWEEN REDEFINE, FOUNTAINHEAD AND FPTML AND
WITHDRAWAL OF THE FOUNTAINHEAD CAUTIONARY ANNOUNCEMENT
1. INTRODUCTION AND BACKGROUND
1.1. Fountainhead unitholders are referred to the previous cautionary announcements, the last of which was
released on SENS on 18 June 2014 in terms of which Fountainhead unitholders were advised that the
engagement between Redefine and FPTML in relation to the possible terms of a potential merger
between Redefine and Fountainhead was continuing and Fountainhead unitholders were accordingly
advised to exercise caution when dealing with their Fountainhead units until a further announcement
was made.
1.2. Fountainhead unitholders are now advised that given Redefine’s strategic stake in Fountainhead (which
is currently approximately 65.9% of Fountainhead’s issued units) and the fact that Redefine’s wholly
owned subsidiary, FPTML, manages the Fountainhead property portfolio, the board of directors of
Redefine and the independent committee of the board of directors of FPTML, comprising Michael
Kirchmann, Victor Anthony Christian, Haroon Yusuf Laher, Marius Barkhuysen, Thomas Alexander
Wixley and David Stanley Savage (the “independent committee”), have agreed that a merger of
Redefine and Fountainhead makes strategic sense.
1.3. In this regard, Redefine has entered into an agreement (the “transaction agreement”) with
Fountainhead and FPTML in terms of which Fountainhead will dispose of all its assets, including the
entire Fountainhead property portfolio in exchange for 82 new Redefine shares (the “Redefine
consideration shares” or “consideration shares”) for every 100 Fountainhead units in issue and the
assumption by Redefine of all of Fountainhead’s liabilities, including Fountainhead’s interest-bearing
debt (the “transaction”).
1.4. If the transaction is approved and becomes unconditional, Fountainhead will no longer qualify for a
listing under the Listings Requirements of the stock exchange operated by the JSE limited (“JSE”) and,
simultaneously with the implementation of the transaction, Fountainhead will be delisted from the JSE.
The winding up of Fountainhead will commence as soon as practically possible after the effective date,
being 1 September 2014 (the “effective date”) and will be completed as soon as practically possible
after implementation of the transaction.
2. RATIONALE FOR THE TRANSACTION
2.1. Redefine is currently the largest unitholder in Fountainhead and is also the owner of FPTML, which is
the asset manager and controls all the assets of Fountainhead. Given these interests of Redefine in
Fountainhead and FPTML, there is no other party that can acquire the Fountainhead property portfolio
without Redefine’s consent. The transaction will allow for additional benefits in that the transfer of all
of Fountainhead’s assets to Redefine will result in:
2.1.1. the assets being managed in an optimal manner on a portfolio basis;
2.1.2. lower costs as a result of the removal of costs associated with retaining Fountainhead as a
separate entity; and
2.1.3. more efficient asset allocation and balance sheet management as there would be no
contentious allocation decisions to be made between housing an asset in Fountainhead as
opposed to Redefine.
2.2. The trade in Fountainhead on the JSE has dropped significantly since Redefine acquired its
approximate 65.9% stake and this lower tradability makes it harder for minority unitholders to exit
from their holding. The transaction provides an opportunity for Fountainhead unitholders to exchange
their Fountainhead units for more liquid Redefine shares.
2.3. While existing Fountainhead unitholders are supportive of its portfolio composition, there are divergent
views on the future direction of Fountainhead. The transaction will expose Fountainhead unitholders to
a diverse property portfolio and property assets valued at approximately R44.5 billion and the benefits
of economies of scale and cost savings due to synergies between the Fountainhead and Redefine
property portfolios will benefit Fountainhead unitholders and Redefine over time.
3. MECHANICS OF THE TRANSACTION
3.1. Fountainhead has, subject to the fulfilment of the conditions precedent set out in paragraph 4 below,
agreed to sell to Redefine all of its assets including the Fountainhead property portfolio in exchange for
82 Redefine consideration shares for every 100 Fountainhead units in issue on the record date, which is
expected to be 5 December 2014 (the “record date”) and the assumption by Redefine of all of
Fountainhead’s liabilities including Fountainhead’s interest-bearing debt.
3.2. The effective date of the transaction is 1 September 2014.
3.3. Fountainhead will, by no later than 8 October 2014 or such later date as may be agreed with Redefine,
declare its income distribution in respect of the six month period ending 31 August 2014 (the
“Fountainhead 2014 final distribution”) on the following basis:
3.3.1. the amount of the Fountainhead 2014 final distribution will be an amount equal to the
distributable income of Fountainhead in respect of the six month period ending
31 August 2014, as determined as soon as practicable after 31 August 2014 in accordance
with the applicable provisions of the Fountainhead trust deed (the “Fountainhead deed”);
and
3.3.2. the record date for participation in the Fountainhead 2014 final distribution shall be a date
which is –
3.3.2.1. after the date upon which the amount of the Fountainhead 2014 final
distribution has been finally determined; and
3.3.2.2. earlier than (i) the record date for participation in the Redefine income
distribution in respect of the six month period ending 31 August 2014 (the
“Redefine 2014 final distribution”) and (ii) the record date for receipt of
the Redefine consideration shares.
3.4. Redefine will, on the effective date, as part of its assumption of Fountainhead’s liabilities, assume
Fountainhead's obligations in respect of the payment of the Fountainhead 2014 final distribution, and
will accordingly make payment of the Fountainhead 2014 final distribution directly to the relevant
Fountainhead unitholders who may be entitled thereto, as and when required in terms of the
Fountainhead deed and the applicable JSE timetables.
3.5. It is expected that on 1 December 2014 (the “Redefine consideration shares issue date”) and in
exchange for all the assets of Fountainhead, including the entire Fountainhead property portfolio:
3.5.1. Redefine will assume all of Fountainhead’s liabilities including inter alia Fountainhead’s
interest-bearing debt; and
3.5.2. in settlement of the balance of the purchase price for Fountainhead’s assets including the
entire Fountainhead property portfolio, Redefine will issue the Redefine consideration
shares; and
3.5.3. in settlement of the distribution by Fountainhead of the Redefine consideration shares to
the Fountainhead unitholders, as further described in paragraph 3.13 below, Redefine will
issue the Redefine consideration shares directly to the Fountainhead unitholders.
3.6. Accordingly, Fountainhead unitholders will receive directly from Redefine 82 Redefine consideration
shares, subject to the rounding principle contained in the JSE Listings Requirements (the “rounding
principle”), for every 100 Fountainhead units held on the record date (the “consideration ratio”). The
rounding principle requires that the allocation of Redefine shares will be such that unitholders will not
be allocated a fraction of a share and as such any entitlement to receive a fraction of a share which is
less than one-half of a share, will be rounded down to the nearest whole number; and any share which
is equal to or greater than one-half of a share but less than a whole share, will be rounded up to the
nearest whole number.
3.7. The Redefine consideration shares will be issued:
3.7.1. ex entitlement to the Redefine 2014 final distribution; and
3.7.2. cum entitlement to the normal income distribution that will be declared by Redefine for
the six months ending 28 February 2015.
3.8. Redefine has warranted in the transaction agreement that the Redefine consideration shares will be
entitled to participate fully in all subsequent distributions declared by Redefine and has undertaken that
it will not, prior to the Redefine consideration shares issue date, make any special or unusual
distribution.
3.9. Redefine understands that the following properties (“the pre-emptive properties”) are subject to pre-
emptive rights, rights of first refusal, options or similar rights (“pre-emptive rights”) which may be
triggered by the transaction and for this purpose the parties have ascribed the following sale price to
each such property:
Property name Sale price
N1 City Mall R798 885 425
Constantia Kloof 3 R330 000 000
Sunridge R48 789 931
3.10. Fountainhead has entered into agreements for the acquisition of certain properties and the disposal of
certain properties. The transaction agreement contains provisions which set out how these properties
are to be dealt with insofar as they form part of Fountainhead’s property portfolio.
3.11. The only warranties that have been sought by Redefine and given by FPTML and Fountainhead are
that:
3.11.1. Fountainhead is the sole and beneficial owner of the Fountainhead property portfolio as at
the signature date of the transaction agreement; and
3.11.2. Fountainhead will, immediately prior to the effective date, be the sole and beneficial
owner of the Fountainhead property portfolio and will, on the effective date,
implementation date (as defined in paragraph 3.12 below) and transfer date (being the
date of registration of transfer of each of the properties in the Fountainhead property
portfolio into the name of Redefine (“transfer date”)), be able to deliver unencumbered
title to the entire Fountainhead property portfolio to Redefine (subject to paragraph 3.9
above and subject to any mortgage bonds securing any interest-bearing debt to be
assumed by Redefine in terms of paragraph 3.5.1 above).
3.12. During the period from the signature date to the third business day following the date upon which the
last of the conditions precedent set out in paragraph 4 below is fulfilled (the “implementation date”),
Fountainhead and FPTML have undertaken to procure that:
3.12.1. Fountainhead will continue to operate in the ordinary, normal and regular course of
business;
3.12.2. they will not effect or otherwise commit Fountainhead to any acquisitions, disposals or
changes to the Fountainhead property portfolio and/or Fountainhead’s funding terms other
than (i) those which Fountainhead or FPTML are already contractually bound to effect or
agree to or (ii) with Redefine’s consent which shall not be unreasonably withheld or
delayed; and
3.12.3. they will not commit to any other contractual arrangements other than in the ordinary and
regular course of its business without Redefine’s consent which shall not be unreasonably
withheld or delayed.
3.13. Fountainhead has undertaken in the transaction agreement to distribute to Fountainhead unitholders the
Redefine consideration shares, and for practical purposes, pursuant to such distribution and Redefine’s
obligation to issue the Redefine consideration shares, the Redefine consideration shares will be issued
directly to Fountainhead unitholders recorded as such in the register on the record date for receipt of the
Redefine consideration shares concerned, in settlement by Fountainhead of such distribution.
3.14. In terms of the transaction agreement the parties are obliged to take such steps as may be required for
the winding up of Fountainhead and for Fountainhead, as part of the winding up and following the
transaction, to distribute to Fountainhead unitholders the Redefine consideration shares in accordance
with the Board Notice 42 of 2014 of CISCA (the “Notice”), as soon as practicably possible after the
granting of approvals contemplated in paragraph 4 below, on the basis that the distribution of the
Redefine consideration shares will be effective on the Redefine consideration shares issue date, and
Redefine will, as a practical measure, on the Redefine consideration shares issue date, issue the
Redefine consideration shares directly to Fountainhead unitholders in settlement of such distribution,
such that each Fountainhead unitholder will be issued the Redefine consideration shares, subject to the
rounding principle.
3.15. Redefine will cause application to be made to the JSE at the appropriate time for the listing of the
Redefine consideration shares on the JSE with effect from the Redefine consideration shares issue date
and will use its best endeavours to ensure that such listing is granted. The parties will not implement the
transaction unless and until the JSE has approved such listing.
4. CONDITIONS PRECEDENT
The transaction is subject to the fulfilment of the following conditions precedent by 31 August 2014 or such
later date as determined in accordance with the transaction agreement:
4.1. the Registrar approving the transaction and making such determinations and giving such approvals and
directions, including any applicable approvals required in terms of sections 102 and 103 of CISCA and
an approval of any requisite amendments to the Fountainhead deed as required for it to be legally
permissible to implement the transaction.
4.2. Fountainhead unitholders, in a general meeting and/or by ballot, as may be required (“Fountainhead
general meeting”), approving all resolutions in the notice of the Fountainhead general meeting and
providing such approvals (including an approval for any requisite amendments to the Fountainhead
deed) as necessary to implement the transaction on the terms and conditions contained in the
transaction agreement, including but not limited to:
4.2.1. an ordinary resolution for the approval of the transaction as a "category 1 transaction" in
terms of the JSE Listings Requirements (requiring the support of more than 50% of the
total number of votes exercisable by Fountainhead unitholders, other than Redefine and
its associates, present in person or by proxy, at the Fountainhead general meeting); and
4.2.2. an ordinary resolution for the approval of the termination of the listing of Fountainhead
units on the JSE and for the winding up of Fountainhead (requiring the support of at least
75% of the total number of votes exercisable by Fountainhead unitholders, other than
Redefine and its associates, present in person or by proxy, at the Fountainhead general
meeting).
4.3. Redefine shareholders in a general meeting (“Redefine general meeting”), approving all such
resolutions as may be required to implement the transaction on the terms and conditions contained in
the transaction agreement, including but not limited to an ordinary resolution to authorise the board of
directors of Redefine to issue the Redefine consideration shares (requiring the support of more than
50% of the total number of votes exercisable by Redefine shareholders, present in person or by proxy,
at the Redefine general meeting).
5. CATEGORISATION OF THE TRANSACTION FOR FOUNTAINHEAD, RELATED PARTY CONSIDERATIONS AND FURTHER DOCUMENTATION
5.1. From a Fountainhead perspective, the transaction constitutes a category 1 disposal in terms of the JSE
Listings Requirements and as such requires the approval of Fountainhead unitholders. Accordingly, a
circular to Fountainhead unitholders (the “Fountainhead circular”), incorporating a notice of general
meeting for the Fountainhead general meeting will be issued in due course.
5.2. As Redefine is a material unitholder in Fountainhead and the sole shareholder of FPTML, the
transaction is, from a Fountainhead perspective, being treated as a disposal to a related party under the
JSE Listings Requirements requiring:
5.2.1. the provision of a fairness opinion by an independent expert acceptable to the JSE. In this
regard the independent committee have appointed Questco Proprietary Limited (the
“independent expert”) to furnish the requisite fairness opinion;
5.2.2. a statement by the independent committee confirming whether the transaction is fair
insofar as Fountainhead unitholders are concerned; and
5.2.3. Fountainhead unitholder approval at the general meeting, as outlined in paragraph 4.2
above.
5.3. As required in terms of the JSE Listings Requirements, the independent expert has concluded that the
transaction is fair to Fountainhead unitholders which opinion will be contained in the Fountainhead
circular.
5.4. The independent committee hereby confirms that it has considered, inter alia, the fairness opinion and
is of the opinion that the transaction is fair insofar as unitholders are concerned and intends to vote in
favour of the resolutions necessary to implement the transaction and recommends that Fountainhead
unitholders vote in favour of the resolutions necessary to implement the transaction.
5.5. Redefine and its subsidiaries will own approximately 65.9% of Fountainhead’s issued units prior to the
implementation of the transaction. Although Redefine and its associates will be taken into account in
determining a quorum at the Fountainhead general meeting, the votes of Redefine and its associates
will not be taken into account in determining the validity of the resolution authorising the transaction.
6. CATEGORISATION OF THE TRANSACTION FOR REDEFINE AND FURTHER DOCUMENTATION
From a Redefine perspective, the transaction constitutes a category 2 transaction in terms of the JSE Listings
Requirements and accordingly does not require approval by Redefine shareholders. However, shareholder
approval will be required to approve all such resolutions as may be required to implement the transaction, on
the terms and conditions contained in the transaction agreement, as outlined in paragraph 4.3 above. In this
regard, a notice for the Redefine general meeting will be issued in due course.
7. PROPERTY INFORMATION
7.1. As further detailed in paragraph 7.5 below, the Fountainhead property portfolio, which includes two
properties in the process of being transferred, was independently valued at R12 358 152 726 and
comprises 66 properties with a gross lettable area (“GLA”) of 935 355 m2. The Fountainhead property
portfolio is concentrated significantly in retail properties representing approximately 73% percent of
the Fountainhead property portfolio by value.
7.2. The Fountainhead retail property portfolio was valued by Trevor King from Old Mutual Investment
Group Proprietary Limited (“OMIG”), a registered independent property valuer.
7.3. The Fountainhead office and industrial property portfolio was valued by Roger Long from Jones Lang
LaSalle Proprietary Limited (“JLL”), Karen Scott from Rode & Associates Proprietary Limited
(“Rode”), Theunis Behrens from Real Insight Proprietary Limited (“Real Insight”), Roger Hunting
from Broll Valuation and Advisory Services Proprietary Limited (“Broll”) and Claire Everatt from Eris
Property Group Proprietary Limited (“Eris”), who are all registered independent property valuers
acceptable to the JSE.
7.4. Detailed valuation reports have been prepared in respect of each of the properties comprising the
Fountainhead property portfolio. A summary of the valuation reports in respect of the Fountainhead
retail property portfolio and the Fountainhead industrial property portfolio will be included in the
Fountainhead circular.
7.5. Details of the properties comprising the Fountainhead property portfolio are set out in the table below:
Weighted average Value attributed by
rental per (m2) as GLA (m2) the independent Disposal price as
Physical Geographic per Fountainhead’s attributed by property valuer as at per the transaction Independent
No. Property name address location Sector records Fountainhead 28 February 2014 agreement property valuer
1. Centurion Mall Heuwel Avenue, Gauteng Retail R163.00 134 582 R3 447 000 000 R3 326 733 725 OMIG
(75%) Centurion
2. Westgate Shopping Ontdekkers Gauteng Retail R147.00 45 034 R700 000 000 R700 000 000 *
Centre (41.32%)* Road,
Roodepoort
3. The Boulders Old Pretoria Gauteng Retail R128.00 49 103 R708 000 000 R730 258 103 OMIG
Shopping Centre Road, Midrand
4. Benmore Gardens Benmore Road, Gauteng Retail R185.00 22 690 2 R614 000 000 R619 784 235 OMIG
Shopping Centre Sandton
5. Bryanston Shopping Hobart Road, Gauteng Retail R152.00 11 643 R185 000 000 R220 511 635 OMIG
Centre Bryanston
6. The Brightwater Republic Road, Gauteng Retail R74.00 42 384 R200 000 000 R177 139 838 OMIG
Commons Randburg
7. Southgate Mall Rifle Range Gauteng Retail R167.00 11 139 R217 928 671 R217 928 671 *
(15.97%)* Road, Mondeor
8. Rosebank Mews 173 Oxford Gauteng Retail R123.00 7 302 R96 000 000 R95 986 766 OMIG
Road, Rosebank
9. Dekema Mall Dekema Road, Gauteng Retail R66.00 4 642 R19 100 000 R12 061 109 JLL
Wadeville,
Germiston
10. Southgate Value Rifle Range Gauteng Retail R88.00 3 651 R26 811 329 R26 811 329 *
Market (19.01%)* Road, Mondeor
11. Kenilworth Centre Doncaster Road, Western Cape Retail R130.00 46 842 R765 000 000 R807 101 263 OMIG
Kenilworth
12. N1 City Mall (58%) Louwtjie Western Cape Retail R147.00 37 242 R767 340 000 R798 885 425 OMIG
Rothman Street,
Goodwood
13. Blue Route Mall Tokai Road, Western Cape Retail R155.00 55 504 R1 110 000 000 R1 057 519 612 OMIG
Tokai, Cape
Town
14. Douglas Roberts 22 Skeen Gauteng Office R123.00 19 166 R255 700 000 R353 894 146 Broll
Centre Boulevard,
Bedfordview
15. Constantia Kloof 3 3 Florida, Gauteng Office R153.00 12 821 R238 400 000 R330 000 000 Broll
(80 %) Florida, Gauteng,
1709
16. 300 Middel Street 300 Middel Gauteng Office R204.00 11 404 R226 000 000 R294 991 217 Real Insight
Street, Nieuw
Muckleneuk
17. Rosebank Corner Jan Smuts Gauteng Office R106.00 9 082 R105 600 000 R106 246 188 Eris
Avenue,
Rosebank
18. Grayston Ridge 144 Katherine Gauteng Office R93.00 10 052 R95 500 000 R82 643 059 Eris
Office Park Street, Sandown,
Sandton
19. Dunkeld Office Park 6 North Road, Gauteng Office R142.00 5 500 R67 500 000 R85 900 976 Eris
Dunkeld West
20. AMR Office Park Concorde Road, Gauteng Office R78.00 9 977 R72 700 000 R71 177 223 Broll
Bedfordview
21. 2 Pybus Road 2 Pybus Road, Gauteng Office R184.00 4 531 R82 000 000 R72 337 882 Eris
Sandton
22. Kimberley-Clark Leicester Road, Gauteng Office R130.00 6 016 R69 000 000 R85 701 144 Broll
House Bedford Gardens
23. 240 Walker Street Sunnyside, Gauteng Office R125.00 7 808 R88 700 000 R102 971 690 Real Insight
Pretoria
24. 260 Walker Street Sunnyside, Gauteng Office R131.00 5 279 R60 600 000 R70 348 870 Real Insight
Pretoria
25. The Ambridge Vrede Avenue, Gauteng Office R97.00 4 459 R47 200 000 R49 923 309 Real Insight
Epsom Downs
26. Yellowwood House 33 Ballyclare Gauteng Office R155.00 2 149 R29 400 000 R37 708 671 Eris
Drive, Bryanston
27. Sunridge (75%) 62 Wierda Road Gauteng Office R194.00 2 921 R42 000 000 R48 789 931 Eris
East, Wierda
Valley
28. Summit Park 439 Summit Gauteng Office R140.00 2 874 R35 100 000 R44 653 842 Eris
Road,
Morningside
29. Lakeside Place Queen Street, Gauteng Office R68.00 3 386 R18 600 000 R17 140 750 JLL
Bruma
30. 256 Kent Avenue 256 Kent Gauteng Office R79.00 2 244 R13 300 000 R13 219 644 Eris
Avenue,
Randburg
31. Continuity SA Old Pretoria Gauteng Industrial R47.00 7 551 R35 608 747 R64 577 656 Rode
(Nashua House) Main Road,
Midrand,
Gauteng, 1685
32. RPA Centre 180 Smith Street, Gauteng Office R62.00 1 716 R11 400 000 R12 761 427 JLL
Fairland
33. 18 The Boulevard Westway, KwaZulu Office R154.00 5 007 R69 800 000 R78 800 857 Broll
Durban Natal
34. Delmat House 28 Jan Hofmeyr KwaZulu Office R145.00 3 939 R52 200 000 R54 017 851 Broll
Road, Westville Natal
35. CIB Insurance 15E Riley Road, Gauteng Office R112.00 7 513 R156 300 000 R155 689 795 Broll
Bedfordview,
Ext 28
36. Kent House 1 Neptune Road, KwaZulu Office R123.00 2 371 R21 500 000 R26 497 520 Broll
Berea West, Natal
Westville
37. Mifa Industrial Park 399 George Gauteng Industrial R39.00 34 002 R138 665 897 R140 258 067 Rode
Street, cnr 16th
Road, Midrand
38. Strijdom Industrial Hammer Gauteng Industrial R50.00 25 037 R107 036 159 R139 710 267 Rode
Park Avenue,
Strijdompark,
Randburg
39. Supreme Industrial Klipriviers-berg Gauteng Industrial R33.00 31 061 R55 638 336 R105 432 090 Rode
Park Road, Steeledale
40. Cedarwood House Ballyclare Drive, Gauteng Office R146.00 4 665 R63 800 000 R80 947 329 Eris
Bryanston
41. Jupiter Ext. 1 Nasmith Road, Gauteng Industrial R34.00 10 540 R20 627 750 R49 407 811 Rode
Jupiter Ext. 1,
Germiston
42. Vodacom Midrand 142 16th Road, Gauteng Industrial R65.00 4 519 R25 006 447 R31 855 968 Rode
Midrand
43. Delta Old Pretoria Gauteng Industrial R89.00 1 504 R11 648 252 R15 058 137 Rode
Road, Midrand
44. Gateway Industrial Graniet Street, Gauteng Industrial R35.00 4 805 R13 314 066 R20 429 385 Rode
Park Jet Park
45. Dismed House 733/747 16th Gauteng Industrial R57.00 2 871 R11 976 463 R18 155 860 Rode
Road, Midrand
46. Strike House Richards Drive, Gauteng Industrial R40.00 1 880 R7 751 005 R8 614 442 Rode
Halfway House
47. Canberra Industrial Derick Coetzee Gauteng Industrial R40.00 2 621 R7 787 025 R10 983 795 Rode
Park Street, Jet Park
48. The House Of Crusher Road, Gauteng Industrial R31.00 2 266 R7 983 029 R7 983 029 Rode
Rubber Crown Extension
49. Jay Park Piet Bekker Gauteng Industrial R41.00 2 264 R5 813 828 R7 627 446 Rode
Street, Jet Park
50. Humsa House Graniet Street, Gauteng Industrial R26.00 2 113 R7 141 574 R6 835 241 Rode
Jet Park
51. Monit House Van der Bijl Str, Gauteng Industrial R35.00 1 985 R6 661 942 R9 487 877 Rode
Meadowdale
52. Astro Place Van der Bijl Str, Gauteng Industrial R37.00 1 876 R6 380 737 R8 934 390 Rode
Meadowdale
53. Staceylee Industrial Derick Coetzee Gauteng Industrial R30.00 1 876 R5 949 922 R7 255 210 Rode
Park Street, Jet Park
54. Mercury Park Piet Bekker Gauteng Industrial R31.00 2 105 R5 441 241 R8 153 785 Rode
Street, Jet Park
55. Lifetime House Kelly Road, Jet Gauteng Industrial R52.00 1 799 R5 792 707 R10 036 687 Rode
Park
56. Orion Place Piet Bekker Gauteng Industrial R38.00 1 519 R3 949 752 R6 132 708 Rode
Street, Jet Park
57. Dale House Cnr Bell and Gauteng Industrial R47.00 1 308 R5 128 002 R6 935 633 Rode
Flemming
Streets,
Meadowdale
58. Ventura Industrial Derick Coetzee Gauteng Industrial R44.00 1 402 R4 481 573 R5 745 579 Rode
Park Street, Jet Park
59. Hydra Park Piet Bekker Gauteng Industrial R45.00 1 643 R3 932 347 R5 295 200 Rode
Street, Jet Park
60. Gail Industrial Park Patrick Road, Jet Gauteng Industrial R21.00 1 504 R3 481 003 R2 959 518 Rode
Park
61. Precision House Precision Road, Gauteng Industrial R50.00 604 R1 774 922 R3 024 624 Rode
Kya Sand
62. Murrayfield Prospecton KwaZulu Industrial R57.00 17 115 R71 800 000 R96 004 811 Broll
Road, Natal
Prospecton
63. Bedford Gardens Leicester Road, Gauteng Specialised R154.00 12 817 R269 100 000 R269 380 251 Broll
Private Hospital Bedford Gardens
64. Southern Sun O.R. Kempton Park Gauteng Industrial R100.00 14 152 R102 000 000 R102 051 994 JLL
Tambo
International Airport
65. Kenilworth Motor Cr Chichester Western Cape Industrial R96.00 3 701 R59 800 000 R34 750 000 Eris
Dealership and Loch Roads,
(Pending)^ Kenilworth
66. Robor Industrial 233 Barbara Gauteng Industrial R34.00 120 277 R568 000 000 R570 700 000 JLL
(Pending)^ Road, Germiston
Total 935 355 R12 358 152 726 R12 840 862 496
*Westgate Shopping Centre, Southgate Mall and Southgate Value Market have not been valued by an
independent property valuer as these properties are in the process of being disposed and transferred out of the
Fountainhead property portfolio. The values of these properties are based on the disposal prices in terms of the
concluded sale agreements.
^ These properties are in the process of being transferred to Fountainhead.
8. FINANCIAL EFFECTS OF THE TRANSACTION ON A FOUNTAINHEAD UNITHOLDER AND ON FOUNTAINHEAD
8.1. Set out in the table in paragraph 8.3 below, are the pro forma financial effects for a Fountainhead
unitholder taking into account the consideration ratio.
8.2. The pro forma financial effects on a Fountainhead unitholder have been calculated in respect of 1 (one)
Fountainhead unit held before implementation of the transaction and 0.82 of a Redefine linked unit held
after implementation of the transaction.
8.3. The pro forma financial effects for a Fountainhead unitholder are as follows:
Fountainhead Redefine Percentage
unitholder shareholder Change
before 1 after 2,3 (%)
NAV per unit (excluding deferred tax and non- 748.05 754.96 0.92
controlling interest) (cents)
NTAV per unit (excluding deferred tax and non- 748.05 628.40 (15.99)
controlling interest) (cents)
Headline earnings per unit (cents) 29.37 25.43 (13.41)
Earnings per unit (cents) 67.57 77.93 15.33
Distribution per unit (cents) 29.00 29.77 2.64
Actual number of units in issue (`000) 1 162 709 3 390 283
Weighted average number of units in issue (`000) 1 162 709 3 320 713
Notes and assumptions:
1. The financial information in the “Fountainhead unitholder before” column has been extracted,
without adjustment, from the unaudited interim results of Fountainhead for the six months ended
28 February 2014 published on 10 April 2014.
2. The financial information in the “Redefine shareholder after” column has been based on the
unaudited group results of Redefine for the six months ended 28 February 2014 published on 8 May
2014 after adjusting for the following:
a) The issue of 325 181 626 Redefine consideration shares to existing Fountainhead unitholders
(other than Redefine or its subsidiaries) at a price of R9.51 (being the 30 day volume weighted
average traded price prior to the date of signature of the transaction agreement).
b) The reversal of a non-controlling interest of R324 million in the statement of comprehensive
income and the reversal of the non-controlling interest of R2.966 billion in the statement of
financial position.
c) An amount of R126 million, being the consideration premium in excess of Fountainhead’s net
asset value relating to non-controlling interests, has been deducted against reserves in terms of
IFRS 3: Business Combinations.
d) Transaction costs are assumed to be approximately R7.34 million and have been capitalised in
full.
e) With the exception of the adjustment set out in note 2d) above, all adjustments are expected to
have a continuing effect.
3. The per unit financial information has been derived by taking the “after” financial effects for
Redefine as detailed in notes 2a) to 2e) above and multiplying these by the consideration ratio to
provide the pro forma financial effects for a Fountainhead unitholder.
8.4. The pro forma statement of financial position and the pro forma statement of comprehensive income of
Fountainhead, after implementation of the transaction, based on the published interim financial results
of Fountainhead for the six months ended 28 February 2014, will be set out in the Fountainhead
circular.
8.5. Set out in the table in paragraph 8.8 below are the pro forma financial effects of the transaction on
Fountainhead. The pro forma financial effects are based on the published interim financial results of
Fountainhead for the six month ended 28 February 2014.
8.6. The pro forma financial effects have not been reviewed or reported on by an independent reporting
accountant or by Fountainhead’s external auditor.
8.7. The pro forma financial effects are the responsibility of the board of directors of FPTML. The pro
forma financial effects have been prepared for illustrative purposes only to illustrate the effects on
Fountainhead’s financial position, changes in equity, results of operations and cash flows subsequent to
the transaction and due to its nature may not fairly present Fountainhead’s financial position, changes
in equity, results of operations and cash flows after implementation of the transaction.
8.8. The pro forma financial effects of the transaction on Fountainhead are as follows:
Before the Pro forma Percentage
transaction after the Change
transaction (%)
Net asset value (“NAV”) per unit (excluding 748.05 0 (100)
deferred tax and non-controlling interest) (cents)
Net tangible asset value (“NTAV”) per unit 748.05 0 (100)
(excluding deferred tax and non-controlling
interest) (cents)
Headline earnings per unit (cents) 29.37 0 (100)
Earnings per unit (cents) 67.57 0 (100)
Distribution per unit (cents) 29.00 0 (100)
Actual number of units in issue (`000) 1 162 709 1 162 709 -
Weighted average number of units in issue (`000) 1 162 709 1 162 709 -
Notes and assumptions:
1. The numbers set out in the “Before the transaction” column have been extracted, without
adjustment, from Fountainhead’s published interim results for the six months ended 28 February
2014.
2. It is assumed that the transaction will be implemented on 1 September 2013 for purposes of the
statement of comprehensive income and therefore Fountainhead would not have earned any rental
income or incurred any operational expenses for the period and accordingly all statement of
comprehensive income items have been reversed.
3. It is assumed that the transaction will be implemented on 28 February 2014 for statement of
financial position purposes.
4. In terms of the transaction, Fountainhead will dispose of all of its assets including its entire property
portfolio.
5. In terms of the transaction, Redefine will assume all of Fountainhead’s liabilities including
Fountainhead’s interest-bearing borrowings together with any interest rate swaps.
6. The value of the Redefine consideration shares to be issued by Redefine to Fountainhead unitholders
as consideration for all of Fountainhead’s assets including the Fountainhead property portfolio is
assumed to be R9.13 billion.
7. It is assumed that a profit of R369 million will be realised from the transaction being the
consideration premium to the Fountainhead net asset value.
8. In terms of the transaction the consideration shares will be distributed to Fountainhead unitholders.
9. All adjustments are assumed to have continuing effect.
9. FINANCIAL EFFECTS OF THE TRANSACTION ON REDEFINE
9.1. Set out in the table in paragraph 9.4 below are the pro forma financial effects of the transaction on
Redefine. The pro forma financial effects are based on the published interim financial results of
Redefine for the six months ended 28 February 2014.
9.2. The pro forma financial effects have not been reviewed or reported on by an independent reporting
accountant or Redefine’s external auditor.
9.3. The pro forma financial effects are the responsibility of the board of directors of Redefine. The pro
forma financial effects has been prepared for illustrative purposes only to illustrate the effects on
Redefine’s financial position, changes in equity, results of operations and cash flows subsequent to the
transaction and due to its nature may not fairly present Redefine’s financial position, changes in equity,
results of operations and cash flows after implementation of the transaction.
9.4. The pro forma financial effects of the transaction on Redefine are as follows:
Before the Pro forma Percentage
transaction after the Change
transaction (%)
NAV per linked unit/share (excluding deferred tax 921.82 920.69 (0.12)
and non-controlling interest) (cents)
NTAV per linked unit/share (excluding deferred 751.10 766.34 2.03
tax and non-controlling interest) (cents)
Headline earnings per linked unit/share (cents) 24.78 31.02 25.15
Earnings per linked unit/share (cents) 90.69 95.04 4.79
Distribution per linked unit/share (cents) 36.40 36.30 (0.27)
Actual number of linked units in issue 3 065 102 3 390 283 10.61
/shares(`000)
Weighted average number of linked units/shares in 2 995 531 3 320 713 10.86
issue (`000)
The notes and assumptions for Redefine’s pro forma financial effects are the same as those set out in
note 2 for the pro forma financial effects on a Fountainhead unitholder presented above.
10. WITHDRAWAL OF FOUNTAINHEAD CAUTIONARY ANNOUNCEMENT
Following the release of this joint transaction announcement, the Fountainhead cautionary announcement
published on SENS on 18 June 2014 is withdrawn and caution is no longer required to be exercised by
Fountainhead unitholders when dealing in their Fountainhead units.
11. FOUNTAINHEAD RESPONSIBILITY STATEMENT
To the extent that the information in this joint transaction announcement relates to Fountainhead, the
independent committee accepts responsibility for such information and confirms that, to the best of the
respective knowledge and belief of the members of the independent committee, the information is true and does
not omit anything likely to affect the importance of the information included.
12. REDEFINE RESPONSIBILITY STATEMENT
To the extent that the information in this joint transaction announcement relates to Redefine, Redefine’s board
of directors accepts responsibility for such information and confirms that, to the best of the respective
knowledge and belief of the members of the Redefine board of directors, the information is true and does not
omit anything likely to affect the importance of the information included.
4 July 2014
Corporate advisor and sponsor to Redefine
Sponsor to Fountainhead
Java Capital
Legal advisor to Redefine
Cliffe Dekker Hofmeyr
Financial advisor and independent transaction sponsor to Fountainhead
Rand Merchant Bank
Legal advisor to the independent committee
Bowman Gilfillan
Tax advisor
Edward Nathan Sonnenbergs
Independent expert
Questco Corporate Advisory
Date: 04/07/2014 04:40:00 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
the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct,
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,
information disseminated through SENS.
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