RMB advises on Growthpoint’s strategic disposal of its stake in Capital & Regional

The challenge

Growthpoint Properties Limited sought to dispose of its 69% stake in Capital & Regional plc (C&R) – a UK retail property focused Real Estate Investment Trust (REIT) that had a primary listing on the Main Market of the London Stock Exchange (LSE) and secondary listing on the stock exchange operated by JSE Limited (JSE).

The transaction formed part of a broader strategic goal to simplify Growthpoint’s business and optimise its capital allocation. Adding complexity, the disposal was conducted under the jurisdiction of the UK Takeover Panel, requiring adherence to stringent regulatory and procedural requirements. The deal’s intricate cross-border dynamics further necessitated careful co-ordination among multiple stakeholders, including Growthpoint, C&R and NewRiver REIT plc (NewRiver), as well as their respective advisers

The RMB solution

RMB acted as lead financial adviser and transaction sponsor to Growthpoint, leveraging its extensive M&A expertise and its affiliation with Dial Partners LLP through the Clairfield International network to provide specialised UK-specific advisory support. This partnership ensured seamless navigation of the UK Takeover Code and facilitated smooth execution of the deal. The disposal involved NewRiver acquiring all the issued, and to be issued, share capital of C&R, culminating in the delisting of C&R from both the LSE and JSE.

RMB’s advisory role extended beyond regulatory compliance, playing a pivotal role in aligning the interests of the involved parties. This hands-on approach ensured the successful execution of the GBP147 million transaction, which was structured to include a headline offer price of 62.5 pence per C&R share, split equally between cash and new NewRiver shares. This pricing represented attractive premiums of 21% to the undisturbed closing price, 21% to the three-month VWAP, and 18% to the six-month VWAP.

Results and benefits

The transaction allowed Growthpoint to simplify its business, optimise its capital allocation and strengthen its financial position. Growthpoint realised approximately GBP50.7 million in cash proceeds and now holds a 14% stake in the enlarged NewRiver group. The deal reinforced Growthpoint’s strategic focus on its core markets while demonstrating RMB’s capabilities in cross-border M&A advisory.

This successful outcome also enabled a strengthening of the RMB partnership with a key client, Growthpoint and cementing RMB’s position as a trusted adviser in the real estate sector.