Vukile Property Fund would not be making an offer to take control of UK shopping centre owner Capital & Regional, the group said on Tuesday.
Last week Capital & Regional confirmed it had received a nonbinding indicative proposal from Vukile regarding a possible cash and share offer. The proposal was made on April 19.
Vukile said it had engaged with Capital & Regional’s largest shareholder, Growthpoint “to evaluate the potential terms and structure of a possible offer”.
However, Vukile “has not been able to reach agreement with Growthpoint as to the terms and structure of any possible offer and therefore confirms that it does not intend to make an offer”, the company said in a note to investors.
Growthpoint controls about 68.1% of Capital & Regional, which owns shopping centres in Edinburgh, Hemel Hempstead, Ilford, Maidstone, Walthamstow and Wood Green.
SA-based Vukile owns a portfolio of shopping malls predominantly in townships and rural areas in the home market, while it also has Spanish assets held in Madrid-listed subsidiary Castellana, in which Vukile has a 99.5% interest.
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.
Vukile’s decision not to make an offer does not necessarily mean the UK company will be without new owners in future. Capital & Regional is said to be aware that Growthpoint has also received a preliminary expression of interest from NewRiver Reit for its business. As of last week, Capital & Regional confirmed it had received no offer proposal from NewRiver “at this stage”.
On the day that news of Vukile’s proposal broke, Capital & Regional’s share price went up 19%. Its shares shot up again on Tuesday soon after the announcement that Vukile would not be proceeding.
At 2.02pm Capital & Regional’s stock was up 4.97% at R14.80, while Vukile shares were 1.49% firmer at R15.03.
With Jacqueline Mackenzie
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