Two activist shareholders in Safari Investments, which owns shopping centres in Gauteng and Swakopmund, say the company's board and management must stop using delay tactics to prevent it from being taken over by Community Property Company (Comprop).
Unlisted group Comprop is trying to buy Safari for R1.8bn in cash but Safari's board has refused to discuss the offer with its shareholders.
Albie Cilliers, the head of Cilandia Capital, said it was clear that the company's board was not independent and that members feared they would lose their jobs and access to a group of integrated businesses if Comprop bought out Safari.
"Safari may be a listed property fund but it does more than just buying and renting out properties. It is involved throughout, doing construction, development, financing, marketing; everything. The directors and management who own stakes in this group of integrated businesses are concerned they will lose out if Comprop wins," he said.
"Comprop is unlisted. If it takes over Safari, the company will be unlisted and the management and directors will most likely not be retained," Cilliers said.
Opportune Investments chief investment officer Chris Logan said he was getting frustrated with Safari's board, who appeared to be against the July takeover offer from Comprop.
He and Cilliers said larger shareholders of Safari's shares could call for an extraordinary meeting at which new independent directors could be appointed.
Safari's board and management declined to comment on the allegations, referring Business Day to an announcement it made on the stock exchange news service (SENS) on Monday.
Safari said in the SENS statement that a large number of shareholders had said they would vote against the cash takeover offer by Comprop, and as a result an impasse had been reached.
It said that shareholders holding more than 25% of its shares had said they would vote against Comprop’s offer to pay an ex-dividend price of R5.90 a share.
Safari's share price was trading at R4.84 at 3.15pm on Tuesday.
“Due to opposing positions expressed by shareholders in the confirmatory letters, it is presently highly unlikely that the scheme will be approved by the requisite majority of shareholders ... notwithstanding the significant level of support for the Comprop proposal,” Safari said.
Institutional investors in listed property countrywide have encouraged property counters to consolidate to create larger, more liquid companies that can offer dividends that exceed inflation growth in a weak economic environment.
Safari first became a takeover target in March when Fairvest announced the two companies were in merger talks. In July they said the companies would merge through a share swap deal, but Logan and other shareholders including Stanlib said the deal undervalued Safari. Safari's board initially said it was only considering he Fairvest offer and no others.
Then, at the company's AGM in August, Logan and Cilliers tried to find out why the board would not entertain Comprop's offer. The board, its chair and management refused to talk about either takeover offer.
Two weeks ago, Safari's board announced the Fairvest offer had been withdrawn. It had valued each Safari share at R4.30.
Logan said Safari's board needed to be transparent and communicate with its shareholders.
"We need Safari to publish the reasons these shareholders want to vote against the Comprop deal, which I believe is in the interests of their shareholders. Otherwise, perhaps those investors who are in favour of the deal can call an extraordinary meeting to remove the board and push the deal through," he said.
Bridge Fund Managers, which owns a significant stake in Safari, has said it supports Comprop's offer.
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