Competition Tribunal approves R2.47bn property groups merger.

Posted On Wednesday, 06 August 2003 02:00 Published by
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Pretoria - The Competition Tribunal has unconditionally approved the R2.47 billion merger of listed property loan stock companies Primegro Properties and Growthpoint Properties.

Pretoria - The Competition Tribunal has unconditionally approved the R2.47 billion merger of listed property loan stock companies Primegro Properties and Growthpoint Properties.

The merger will create the largest property loan stock company listed on the JSE Securities Exchange, with combined assets of R5 billion and a market capitalisation of R3 billion.

The merged Growthpoint would also be among the top 50 listed companies.

Norbert Sasse, the head of property fund management at Investec Property Group, which manages the Growthpoint portfolio, said yesterday the companies were very excited about getting unconditional approval from the tribunal for the merger, and all the properties in Primegro's portfolio were transferred into the name of Growthpoint at the deeds office yesterday.

Sasse said the tribunal's approval of the merger was the trigger for implementing the transaction, taking on the new debt in Growthpoint and reducing debt overall in Growthpoint.

It was also the trigger for the issue of shares for the cash offer to take place. "It gets that process rolling and the ultimate integration of the portfolios," he said.

"In terms of the transaction, the people responsible for the day-to-day management of the Primegro portfolio also become employees of the Investec Property Group and that process can now commence ."

Sasse said the integration of the companies was quite a complex issue because the companies had different software systems. They would have to be analysed and the "best of breed" identified and then move the management of buildings off one system and on to the other.

He said there was also the process of physically relocating people from one building to another.

"I guess we hope to be fully integrated, with all the properties managed by one system and all the people housed in the same building, by early next year," he said.

The Competition Commission had earlier recommended that the tribunal unconditionally approve the proposed merger and shareholders from both companies overwhelmingly supported the transaction last month.

Primegro has a portfolio of 52 properties and the merging firms have property portfolios comprising commercial, retail, residential, hotels and industrial properties.

In terms of the merger, Primegro would be voluntarily wound up and Growthpoint linked units would be distributed to Primegro linked unit holders as a liquidation dividend.

The cash portion of the deal was to be raised in part by a new share issue of R300 million at R5.30 a linked unit in terms of an issue of shares for cash.


Publisher: Business Report
Source: Business Report

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