The board of Capital & Regional (CAL) has recommended a partial takeover offer from Growthpoint Properties, which if approved will see the South Africa-listed Reit take a controlling, 51.2 per cent stake in the retail landlord.
In an unusual structure, Growthpoint has agreed to buy 30.3 per cent of the group’s outstanding shares at 33p a share, while subscribing to acquire a further £78m-worth of shares in a separate fundraising at 25p a share. The partial offer amounts to a 100 per cent premium to the share price on 10 September, which was the last day before news of a potential deal was first announced, while the fundraising will largely be used to reduce leverage and fund capital expenditure.
The transaction was trumpeted by management for “allowing existing shareholders the opportunity to realise an attractive premium to the current share price... while affording them the opportunity to participate in the future value of a recapitalised Capital & Regional”. However, the deal – together with a recent re-valuation of Capital’s portfolio – mean the pro-forma net asset value will drop to 44p per share.
Analysts at Peel Hunt said the deal puts Capital on “firmer ground”, by introducing “a large, well-capitalised and supportive shareholder”.
