Safari Investments’ share price rose the most in two months on Monday in reaction to the appointment of two directors after a call from a big shareholder for a board shake-up.
Safari, which owns eight malls in towns and semiurban areas, announced on Friday after the market closed that it had appointed Greg Heron and Pine Pienaar as independent non-executive directors.
The share price jumped 14.29% to close at R4 a share giving the company a market share of R1.24bn.
Shareholder activist Albie Cilliers said the new appointments were a victory for shareholders who have seen too much value destroyed. The surge in the share price is “on the prospects of better governance and potentially fewer impediments to a deal”, he said.
Safari has been criticised for having a board intolerant of a possible takeover and with too many conflicts of interest. Safari was involved in two unsuccessful takeover bids, which resulted in tension between the board and minority shareholders.
A few weeks ago Safari's largest shareholder, Bridge Fund Managers, which holds a fifth of its stock, called for better corporate governance at the company. Safari has had a history of appointing directors who use their private businesses to do work with Safari.
Bridge Fund Managers CEO Paul Stewart said recently that “a comprehensive overhaul of the board, its structures and all parties related to the business is necessary”.
On June 15, institutional shareholders including Bridge, Heriot, which owns 10% in Safari, SA Corporate Real Estate and Group, retired Safari founder Francois Marais, Pienaar and Cilliers sent a letter to the company’s board calling for an overhaul.
Their letter called for the resignation of all of the directors of Safari, other than CEO Dirk Engelbrecht and its financial director Willem Venter.
They proposed the appointment of Heriot’s CEO Steven Herring as the new nonexecutive chair, Heron as lead independent director and former Emira Property Fund CEO James Templeton, Pienaar and Oratile Mosetlhi as new directors.
Safari said via the JSE's stock exchange news service it had noted the letter.
Safari’s chair Allan Wentzel said on Monday that Safari was considering input from its shareholders including the letter calling for the board shake-up.
“You are aware that we have received communications from certain shareholders. We are considering their input. Any further changes will be scheduled for the AGM on September 14 2020,” he said.
“I would not be so presumptuous as to speak for Greg and Pine. I have known Pine for several years and I have been in communication with Greg. I am sure that all their opinions will be very objective,” he said.
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