Redefine announced that it planned to acquire Fountainhead Manco in March last year.
"The manner in which this transaction has been dealt with by the independent committee of the board and by the Fountainhead trustees‚ has caused protracted delays and uncertainty‚ which is now having a significant detrimental impact on the Fountainhead assets and day-to-day running of the business‚" said Marc Wainer chief executive of Redefine.
"We believe that the process is still several months from conclusion and that it is important to take decisive action to protect and safeguard the interest of all parties‚" he said.
Wainer explained that three key Fountainhead staff members had recently resigned and negotiations with potential tenants‚ particularly in relation to proposed redevelopments‚ were unduly complicated and delayed‚ with key decisions around capital expenditure not being timeously made.
As announced previously‚ Redefine resolved some time ago that‚ if its proposal to acquire the assets of Fountainhead was not successful‚ it would seek to obtain a meaningful stake in Fountainhead in order to ensure alignment of interests between Redefine and Fountainhead unitholders.
In pursuit of this strategy Redefine has to date bought about 18% of the Fountainhead's units‚ making it the largest Fountainhead unitholder. Redefine intends‚ on an accelerated basis‚ to acquire up to 175m additional units‚ in tranches of not less than a million‚ in exchange for 12.15 Hyprop units for every 100 Fountainhead units. The Fountainhead units will be accepted on a 'first come‚ first serve' basis.
In addition‚ Redefine has decided to bolster the executive capacity and property experience on the Fountainhead Manco board‚ in line with the Registrar of Collective Scheme's requests and to ensure that the board is able to deal proactively and urgently with the challenges facing Fountainhead and its portfolio.
In this regard Redefine has appointed three executive directors‚ Marc Wainer‚ David Rice and Mike Lewin‚ to the board of Fountainhead Manco. In order to ensure the retention of an appropriate balance between executive and non-executive directors‚ Redefine has also appointed Lyndon Kan as an independent non-executive director. All appointments are subject to the approval of the Registrar.
Redefine has also stated that it will‚ if required‚ take all appropriate and available steps to protect the value of its equity in Fountainhead Manco. Redefine's senior counsel has advised that the Growthpoint offer‚ and any other similar offer‚ lies outside of the administration of Fountainhead‚ and therefore the Fountainhead Manco board is not entitled to entertain‚ agree to or seek to implement the proposal.
"We trust that the board will act decisively to end the current uncertainty by withdrawing from its engagement with Growthpoint‚" Wainer said.
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