Fairvest proposes Safari deal


Fairvest proposes Safari deal


Published Date: 2019-07-03 | Source: Stephen Gunnion | Author: Stephen Gunnion

Fairvest proposes Safari deal

The "friendly merger" of the two real estate investment trusts is expected to result in immediate cost savings and improved funding costs over time.

Fairvest Property Holdings and Safari Investments are pushing ahead with a "friendly merger" in a deal they say will save costs and result in a more efficient property portfolio. The real estate investment trusts first proposed the merger in March.

Under the deal, Safari will acquire Fairvest through a scheme of arrangement, with shareholders receiving 0.45 Safari shares for each Fairvest share. A scheme requires the approval of shareholders representing 75% of a company's stock.

Both property group focus on retail properties aimed at the lower income groups and said there were synergies between their respective management teams and operational platforms. If the scheme is approved, Fairvest CEO Darren Wilder will head the combined group, while Safari CEO Dirk Engelbrecht will become chief operating officer. Jacque Kriel, currently chief financial officer at Fairvest, will retain that position.

The groups said the merger would also result in critical mass. Safari's market capitalisation sits just below R1.4 billion while Fairvest is worth around R2 billion.

As the deal is effectively a reverse takeover of Safari by Fairvest, the JSE needs to approve Safari's continued listing. Fairvest would then be delisted from the exchange.

Fairvest's shares fell 1.5% to R1.95 yesterday while Safari rose 7.4% to R4.50.


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