Safari accused of frustrating takeover bid


Safari accused of frustrating takeover bid

Published Date: 2019-09-11 | Source: Stephen Gunnion | Author: Stephen Gunnion

Safari accused of frustrating takeover bid

Community Property Company has challenged Safari to publish letters from shareholders it claims are against the buyout.

Community Property Company (Comprop) has accused Safari Investments of trying to frustrate its R1.83 billion takeover bid by failing to present the offer to its shareholders.

In a letter that was sent to Safari's independent board of directors and published on the JSE's SENS yesterday, Comprop challenged Safari to publicly disclose on its website the Letters of Intent it claimed to have received from shareholders representing more than 25% of its stock who it claimed were against the bid. Comprop has the support of five of Safari's biggest shareholders with 55.7% of its issued shares. The transaction has been put forward as a scheme of arrangement, which requires 75% approval.

Comprop presented a firm intention cash offer to buy Safari at an ex-dividend price of R5.90 per share on 19 July, a 38.8% premium to Safari's closing share price the previous trading day. The offer scuppered a friendly merger between Safari and Fairest Property, which didn't have the support of the five big shareholders and therefore wouldn't reach the required 75% threshold. The proposed transaction with Fairvest worked out at an effective price of R4.15 per Safari share.

Comprop told Safari's board it was inappropriate to canvass shareholders on how they would vote before it had obtained independent advice on whether its offer was fair and reasonable. It said it had the backing of a significant number of Safari shareholders in calling for the group to publish its firm intention announcement without any further delay so investors could evaluate the offer.

It also questioned the position of Safari's independent board to abstain from voting the shares of black economic empowerment partner Southern Palace at a scheme meeting. It said Southern Palace had also given irrevocable undertakings to Comprop.

Safari owns seven shopping centres in South Africa and one in Swakopmund, Namibia. Comprop is an unlisted property fund which forms part of Futuregrowth Asset Management's portfolio of developmental investments. Its R4.5 billion portfolio comprises 20 shopping centres, located in eight of the country's nine provinces, and it is managed by Capital Land Asset Management.

Safari's shares rose 3.6% to R5.18 in a single trade yesterday.

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