Shares in UK shopping centre owner Capital & Regional soared on Thursday after it confirmed it had received a nonbinding indicative proposal from Vukile Property Fund regarding a possible cash and share offer.
The proposal, which is for the entire issued share capital of Capital & Regional, was received on April 19, it said in a statement.
Its shares rose nearly 20% by the close to R14.39 after it issued a statement “in response to press speculation”. Shares in Vukile were down 1.32% to R14.94.
Capital & Regional owns shopping centres in Edinburgh, Hemel Hempstead, Ilford, Maidstone, Walthamstow and Wood Green.
The proposal was confirmed in a separate statement by Vukile, which added “its consideration of such an offer is at an early stage”.
“In addition to the Vukile proposal, the board of Capital & Regional confirms that it is aware that its majority shareholder Growthpoint Properties, which holds 68.13% of the company's issued share capital, has also received a preliminary expression of interest from NewRiver Reit Plc in relation to a possible offer in cash and shares for the entire issued, and to be issued, share capital of Capital & Regional,” it said.
The board of Capital & Regional confirmed it has received no offer proposal from NewRiver at this stage. The company has a market capitalisation of about £133.6m.
There could be no certainty that any firm offer would be made for the company, nor as to the terms on which any offer would be made, it said. The board would issue a further statement if and when appropriate.
In terms of UK regulations, the City Code on Takeovers and Mergers requires that Vukile and NewRiver either announce a firm intention to make an offer or that they do not intend to make an offer, by no later than 5pm on June 20.
This deadline can be extended with the consent of the Takeover Panel.
SA-based Vukile owns a portfolio of shopping malls predominantly in townships and rural areas in the home market, while the Spanish assets are held in the Madrid-listed subsidiary Castellana, in which Vukile has a 99.5% interest.
Some of its shopping centres include East Rand Mall and Daveyton Mall in Gauteng, Hammarsdale Junction, Phoenix Plaza, KwaMashu Shopping Centre and Pine Crest in KwaZulu-Natal.
In February, it raised R1bn to fortify its balance sheet for potential acquisitions in SA and Spain, where it has earmarked further opportunities for growth.
The money was raised via an accelerated bookbuild — a share sale held over a short period of time — which was oversubscribed.
Vukile said at the time the equity raise would allow it to reduce its net debt and give it financial flexibility to pursue potential deals. Its loan-to-value ratio, which measures the company’s debt relative to its assets, stood at 42% in September.
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