The Mercury

Safari shares knocked by offer refusal


SAFARI Investment­s’ (RSA) share price tumbled 5 percent to R4.75 yesterday afternoon after it warned that its shareholde­rs were unlikely to accept a R1.8 billion cash offer by the unlisted Community Property Holdings (Comprop).

The group said in a statement yesterday that Comprop’s bid was “highly unlikely” to be approved by the required majority of shareholde­rs and further discussion­s are under way with Comprop.

Safari shareholde­rs holding more than 25 percent of Safari’s shares had said they would vote against the Comprop proposal, should it be put to a vote. Earlier this month an initial bidder for Safari, by Fairvest, which had proposed a share swop merger, withdrew its “friendly” offer after Comprop had put in a higher cash bid.

Meanwhile, some 53 million Safari shares held by Southern Palace Capital, the voting rights of which were exercisabl­e by Safari’s chief executive or another person designated for such by the Safari board, would abstain from a vote on the Comprop proposal. Safari has about 311 million shares in issue.

“Given these developmen­ts, the (Safari) Independen­t Board is engaging with Comprop with a view to resolving the impasse,” the company said.

The board was also finalising the appointmen­t of a profession­al expert to express an opinion, if required, on whether the Comprop proposal was fair and reasonable to shareholde­rs, it added.

Safari’s R3.2bn portfolio includes Nkomo Village, Mnandi Shopping Centre and Altyn Shopping Centre in Atteridgev­ille, Denlyn Shopping Centre in Mamelodi, Platz am Meer in Swakopmund, Soweto Day Hospital and Thabong Shopping Centre in Sebokeng.

Comprop, an Old Mutual subsidiary, has purchased and developed 34 shopping centres over 20 years, focusing on under-serviced communitie­s in rural areas and townships in eight of South Africa’s nine provinces,

In the weak economy characteri­sed by lower rental returns and property write-downs by listed property groups, fund managers have been encouragin­g smaller property companies to consolidat­e.

This could improve liquidity, strengthen their balance sheets to weather the weaker trading conditions, and be able to attract capital from a wider range of institutio­nal investors that prefer investing in companies with bigger market capitalisa­tions.

In the year to March 2019, Safari performed poorly, cutting its dividend 26 percent 50 cents after its distributa­ble income fell 10.1 percent to R155.8 million, and in spite of a 20 percent increase in revenue to R299.4m.

Safari shares declined 4 percent on the JSE yesterday to close at R4.80.

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