Safari and Fairvest break off talks


Safari and Fairvest break off talks

Published Date: 2019-08-15 | Source: Stephen Gunnion | Author: Stephen Gunnion

Safari and Fairvest break off talks

Safari says its independent board is now in a position to properly engage with Community Property Company on its rival bid for the property group.

Safari Investments and Fairvest Property Holdings have called off a planner merger after it became clear that they wouldn't get the approval of enough Safari shareholders. The two property groups said the termination of the tie-up was by mutual agreement.

Last month, Safari and Fairvest confirmed they were pushing ahead with a friendly merger, first proposed in March, in order to rationalise costs and create a more efficient property portfolio. The transaction would have resulted in a reverse takeover in which Safari acquired Fairvest through a scheme of arrangement, with shareholders receiving 0.45 Safari shares for each Fairvest share. However, weeks later Safari told shareholders that Community Property Company (Comprop) had notified it of its firm intention to make a cash offer of R5.90 per share through a scheme of arrangement. The offer was at a 36% premium to its closing share price on the previous trading day, valuing the bid at R1.83 billion.

Comprop said it already had the support of Safari investors holding 55.7% of its shares, including Bridge Fund Managers, Stanlib Asset Management and SA Corporate Real Estate. The shareholders had undertaken to vote against the Fairvest deal, which would have required the approval of 75% of shareholders.

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 9.1% to R5.30 yesterday while Fairvest closed unchanged at R1.90.

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