GROWTHPOINT Properties, South Africa’s largest listed property, has its sights set on Metboard which, if the deal is successful, would result in Growthpoint having a market cap of R11,8bn and assets worth R13,8bn.
A market cap of R11,8bn would put Growthpoint a step closer to being part of the Alsi 40. Norbert Sasse, Growthpoint CEO, said the main reason for the deal is to gain exposure to the industrial sector and it is just a by-product of the deal to have the Alsi 40 on its doorstep.
Growthpoint made an R2,7bn offer to buy 82,5% of Metboard, making it a wholly owned subsidiary of the group. Growthpoint proposes to exchange one new linked unit for every 1,9 Metboard linked units held.
According to Sasse, it is a win-win situation for both companies. The proposed transaction will not dilute Metboard linked unitholders’ distributions for the period ending March 31 2007 and Growthpoint linked unitholders will receive an enhancement to their future distributions.
Sasse said Growthpoint is currently underweight in industrial properties. Combining forces would increase Growthpoint’s industry exposure, by value, to 22%. Metboard’s 100% industrial portfolio aids this jump. Should the deal be successful, the balance of Growthpoint’s property portfolio would be made up of 40% retail and 38% commercial.
The deal is supported by Metboard’s board of directors but requires a 75% approval from Metboard shareholders. Should they accept, Metboard will delist and operations are expected to be up and running by July.
Proposed consolidated figures report R500m in interest payable and R800m in distributable earnings.
At the date the transaction goes through, special interim dividends will be paid out to all shareholders as a result of non-corresponding year-end financial periods.
The share price fell 5c to close yesterday at R12,85.
