THE plan by Growthpoint, the JSE’s largest property group by market value, to acquire mid-cap Acucap Properties, is on track, with the companies announcing on Thursday that takeover talks were at an advanced stage.
If the merger occurs, Growthpoint would account for more than a quarter of South African listed property by market capitalisation.
The merger could signal a spurt of mergers and acquisitions to close off the year. Investors have been seeking property counters that are more liquid than many listed in SA.
After gaining pace early this year, consolidation started to slow in May. But some deals that were in the works may still be completed.
Growthpoint has a market value of about R58bn; Acucap’s is about R11bn. The listed sector is worth about R280bn.
Growthpoint said on Thursday it was under a cautionary notice and could not comment further. Acucap declined to comment.
In August Growthpoint CEO Norbert Sasse said the talks were “ongoing and positive”.
Acucap Properties and Sycom Property Fund are sister companies.
Acucap acquired more than 90% of Sycom this year and Sycom will be delisted soon, when the two funds merge.
Growthpoint is attracted to Acucap’s retail portfolio as a merged Acucap and Sycom would in effect own several regional shopping centres including Ekurhuleni, Greenacres in Port Elizabeth, Festival in Kempton Park and Key West in Krugersdorp.
In April Growthpoint acquired stakes in Acucap and Sycom Property in a deal worth R4.66bn. It left Growthpoint with just under 35% of Acucap and 15% of Sycom.
Old Mutual Investment Group property portfolio manager Evan Robins said Growthpoint’s pursuit of Acucap made sense. “They are looking to increase their exposure to retail assets. There are not that many shopping centres available, so taking over a fund with a large portfolio of them can work.”
One takeover or merger that analysts speculate could occur this year involves SA Corporate Real Estate Fund. Capital Property Fund tried to acquire SA Corporate two years ago, but the two could not agree on a price. Capital had been interested in SA Corporate’s industrial assets.
However, Capital executive director Andrew Teixeira said on Thursday the fund was not looking at a second attempt.