Shareholders were left frustrated at the annual general meeting (AGM) of Safari Investments, a property company which has been the subject of takeover attempts by Fairvest and Comprop, after its board refused to answer questions about the offers.
A recording of Wednesday’s meeting was sent to Business Day by a participant and showed Safari refusing to discuss the merits of the offers with the shareholders there.
In March, Cape Town-based Fairvest, which owns malls in small towns and semi-urban areas, announced a share-for-share bid for Safari, the owner of shopping centres in lower-income areas mostly situated in Tshwane. But then in July Community Property (Comprop) made a R1.8bn cash offer.
Chief investment officer at Opportune Investments Chris Logan said he chose to participate in the AGM on Wednesday to ascertain how Safari’s board and management viewed each offer. He tried on numerous occasions to cross-examine Safari chair Philip Snyman and the company’s other directors but was shot down at every opportunity.
Some shareholders, including Opportune and Stanlib, have said previously that Comprop’s is the more attractive offer for Safari shareholders. The proposed transaction by Comprop would result in a cash price per Safari share of R5.90.
Fairvest’s deal would see Safari acquire all of Fairvest by way of a friendly merger with a swap ratio of 0.45 Safari shares for each Fairvest share. Fairvest closed 3.74% down at R1.94 on Wednesday. If the deal had gone through at that price, each Safari share would effectively be valued at R4.30.
Safari’s shares were flat at R5.10 on Wednesday. In the year to date Safari’s price is down 10.87%.
During the AGM, Snyman suddenly refused to continue chairing the meeting. Safari CEO Dirk Engelbrecht said he would take over.
Safari’s legal advisers from Webber Wentzel said at the meeting that it was an inappropriate time to talk about corporate action at the company as information around it is price sensitive.
However activist shareholder Albie Cilliers of Cilandia Capital told the meeting Safari was in breach of SA’s company law.
Section 61 (8)(d) of the Companies Act makes it mandatory for public companies to provide for “any matters raised by shareholders, with or without advance notice to the company”.
Logan said the AGM had become a farce. “This is our one opportunity a year to ask questions. You seem to be acting as if this is a second-rate conference call,” said Logan. “This is one of the worst AGMs I’ve ever been to in my life.”
Logan had e-mailed Engelbrecht, who agreed prior to the meeting to discuss his questions about the takeover offers at the meeting.
“Just a reminder that we can only share information currently available in the open market but would welcome questions that will open discussion regarding the bids — our board members will be present and will ultimately vote on the matter at the next board meeting and should be valuable to determine the general feeling from shareholders,” Engelbrecht said in an e-mail to Logan dated August 2.
“Yes absolutely agree hence my comment that I would welcome questions to open up the discussion. Look forward to receiving your questions and thank you for the assistance,” Engelbrecht said in another e-mail to Logan.
At the meeting Safari was asked why it had decided to exclude any other offers from being made by parties other than Fairvest and Comprop. Safari declined to comment.
Fairvest CEO Darren Wilder said he was not party to the AGM and therefore could not comment on proceedings.
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