Metboard Properties Limited (“Metboard”) and Growthpoint Properties Limited (“Growthpoint”) announced today that Growthpoint has made an offer to all Metboard unitholders to acquire all the Metboard linked units it does not already own.

This deal is supported by Metboard’s board of directors and will, if successful and approved in a general meeting by Metboard unitholders, result in Metboard, the only focused industrial property loan stock on the JSE Limited with industrial properties valued at nearly R2 billion, becoming a wholly owned subsidiary of South Africa’s largest JSE-listed property holding and investment company, Growthpoint.

Growthpoint’s intention is to implement the proposed R2.7 billion transaction by way of a scheme of arrangement (“the scheme”) in terms of section 311 of the Companies Act, to be proposed by Growthpoint to Metboard unitholders, to acquire all of the Metboard linked units held by Metboard unitholders.

In terms of the scheme Metboard linked unitholders will receive new Growthpoint linked units based on a switch ratio of 1 new Growthpoint linked unit for every 1.9 Metboard linked units held. The independent financial advisor Ernst and Young has advised that the terms and conditions are fair and reasonable to Metboard unitholders.

“For Metboard’s linked unitholders, the deal is non-dilutionary for their distributions to 31 March 2007, and represents a material capital benefit immediately resulting from the premium of 16%, to the volume weighted average Metboard linked unit price of R6.03 on 23 February 2006,” explains David Kuper, Chairman of Metboard Properties Limited.

Chairman of Growthpoint Properties Limited, Sam Hackner, notes that the inclusion of Metboard as a subsidiary of Growthpoint should signify a substantial growth in earnings per unit for all Growthpoint unitholders from which, pursuant to the unit exchange,  Metboard unitholders as new Growthpoint unitholders will also benefit in addition to increased net asset value.

Special interim distributions will be declared by both companies as a result of non-corresponding year-end financial periods and to ensure that both companies are ex-distribution at the time the scheme is implemented. This will further benefit unitholders as they will receive their expected distribution sooner than in the normal course.

Continuity of asset and property management, which is currently undertaken by Investec Property Group on behalf of both Growthpoint and Metboard, is also assured.

Kuper reports that eligible Metboard linked unitholders controlling approximately 53,5% of Metboard’s linked units, which includes the17.6% already owned by Growthpoint, have indicated their support for the transaction.

The requisite majority is 75% for implementation of the scheme and termination of the listing of Metboard’s linked units on the JSE. This is expected to be finalised by the beginning of July, corresponding with Growthpoint’s new financial year.

Estienne de Klerk, Executive Director of Metboard Properties Limited, points out that there are diverse benefits for Metboard linked unitholders, in addition to the capital upside.

“Metboard linked unitholders also participate in any increase in the Growthpoint linked unit price due to the earnings enhancement in future distributions projected from the Metboard transaction,” explains de Klerk. He elaborates that the combined Growthpoint and Metboard property portfolio provides increased diversification affording Metboard linked unitholders exposure to other property sectors.

“The combined portfolio will attract better debt funding rates than those of Metboard, which has a higher risk rating as a focused fund, and increase the competitiveness of the combined portfolio to acquire further industrial property,” observes de Klerk.

Norbert Sasse, CEO of Growthpoint Properties Limited notes that the transaction furthers Growthpoint’s stated objective to offer investors geographically and sectorally diversified exposure to physical property assets underpinned by long term, sustainable, escalating income streams.

“Growthpoint’s property portfolio is currently underweight in industrial properties which are performing well and the transaction provides a unique opportunity for Growthpoint to acquire a sizeable industrial property portfolio to increase Growthpoint’s future distributions,” says Sasse.

The combined portfolio, including Growthpoint’s recent R1,6 billion acquisition of properties from Tresso Trading, will take Growthpoint’s property assets to in excess of R13,8 billion and its market capitalistion beyond R11,8 billion, whilst continuing to diversify the overall risk within Growthpoint’s property portfolio.

The combined portfolio will result in a more balanced sectoral distribution within the Growthpoint portfolio, taking it from 48% retail, 46% commercial and 6% industrial to 40% retail, 38% commercial and 22% industrial.

The scheme required for Metboard’s incorporation into Growthpoint requires the sanction of the High Court of South Africa. Suspensive conditions include the shareholder approvals as well as those of the Securities Regulation Panel, JSE Limited, South African Reserve Bank, the Competition Authorities and other regulatory authorities.

~ Ends ~

Issued on behalf of :     
Growthpoint Properties Limited
Norbert Sasse
Tel. 011 286 7306
Cell     083 632 1599

Metboard Properties Limited
Estienne de Klerk
Tel. 011 286 7642
Cell 082 553 0873

By Marketing Concepts
Sandy Davey/Bronwen Noble
Tel. 011 783 0700
Cell 083 453 6668/082 855 4349