LONDON: The Board of NewRiver has officially acknowledged its proposal to merge with Capital & Regional, subject to approval from Growthpoint Properties Limited, the majority shareholder of Capital & Regional. The proposal entails a potential offer in cash and shares for the complete share capital of Capital & Regional.

While NewRiver has yet to communicate this proposal directly to Capital & Regional, it plans to do so once Growthpoint expresses willingness to support the terms of the offer. Emphasizing transparency, NewRiver acknowledges that Capital & Regional’s board must independently evaluate the proposal’s fairness and viability.

NewRiver asserts that the proposed merger, based on the terms presented to Growthpoint, would be highly beneficial, projecting a considerable increase in earnings and aligning with NewRiver’s financial objectives. However, it also stresses that the finalization of any offer is not guaranteed, and the terms remain uncertain.

In its assessment, NewRiver’s Board highlights several potential benefits of the merger, including the strategic fit of Capital & Regional’s portfolio with NewRiver’s existing assets, particularly in London and Southeast England. They anticipate significant cost synergies, enhanced income growth opportunities, and improved trading liquidity for the Combined Group.

Furthermore, the merger is anticipated to create a well-diversified portfolio valued at approximately £920 million, with assets under management totaling around £1.7 billion. This combined entity would benefit from a broader tenant base and potentially lower costs of capital, offering a compelling proposition for both Capital & Regional and NewRiver shareholders.

NewRiver underscores its commitment to prudent terms and the preservation of operational expertise in retail real estate throughout the merger process. While the proposal signifies a strategic move towards accelerated growth for NewRiver, the final decision rests on the evaluations and negotiations between the involved parties.

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