Capital & Regional approve merger with Growthpoint Properties 

In a deal worth around R2.9 billion.

South Africa-based real estate company Growthpoint Properties has received approval from Capital & Regional shareholders to a R2.9 billion takeover deal of the latter company, which is headquartered in the UK.

According to Capital & Regional shareholders, more than 97 percent of its shareholders voted in favour of Growthpoint’s takeover offer.

Hugh Scott-Barrett (pictured), the chairman of Capital & Regional, said in a statement: “It is very pleasing to see such strong shareholder support for the proposed transaction, endorsing the board’s view that this will provide a transformational catalyst for the future growth of Capital & Regional.”

Capital & Regional said in September that it was in merger talks with Growthpoint, which made an offer in cash for Capital & Regional shares.  Through this deal, Growthpoint would inject capital to support the company’s strategy through a subscription for new Capital & Regional shares.

Growthpoint’s bid effectively values the deal at £150 million (around R2.9 billion). The deal will see Growthpoint securing a more than 51 percent controlling stake in Capital & Regional. Capital & Regional owns shopping centres in Blackburn, Hemel Hempstead, Ilford, Luton, Maidstone, Walthamstow and Wood Green in the UK. 

Capital & Regional, a comparatively small shopping centre-focused property counter, has been struggling in the face of Brexit uncertainty.  The UK government is seemingly in turmoil while its parliament is suspended in the run-up to October 31, when it is scheduled to leave the EU.

The Brexit process, which began in 2016, has claimed high-profile South African companies, among others, Rebosis Property Fund, which recently exited UK-based New Frontier Properties, selling its 49.4 percent stake in the company for a mere £40 (about R730), after buying the interest for R1.2 billion in 2015.