SA largest property company offers juicy price for UK shopping mall owner

Canopy by Hilton in Cape Town (artist's impression)
Canopy by Hilton in Cape Town (artist's impression)

Growthpoint [JSE:GRT], SA’s largest listed property company, has made a sweet bid to acquire more than half of UK shopping mall owner Capital & Regional plc.

It is offering shareholders 33 pence per Capital & Regional share – double the level at which it was trading in September before Growthpoint made its intentions known. It aims to secure around 30% of the company through this offer. Capital & Regional will then also issue new shares to Growthpoint which will push its holding up to above 51%.

Growthpoint owns 450 buildings including a number of company headquarters and shopping centres like the Brooklyn Mall and Constantia Village Mall in South Africa. It also has a 50% stake in the V&A Waterfront and owns 63% of Growthpoint Properties Australia, which has 57 properties in Australia.

Capital & Regional, meanwhile, owns £1bn in properties in the UK, mostly shopping malls.

As part of the transaction, Capital & Regional will receive £77.9m (before costs), and it has agreed with Growthpoint to use at least £50m of the proceeds to reduce its debt levels.

Growthpoint says it is interested in Capital & Regional because it offers retailers affordable rentals averaging at £15 per square foot, and has a "significant concentration" in the attractive London and South East England markets. In added it will support Capital & Regional to acquire further properties in the UK, but it first wants to see the companies reduce its debt levels.

Compiled by Helena Wasserman

* This article has been amended to refer to Capital & Regional throughout. 

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