COMPROP R1.8 BILLION ALL CASH OFFER FOR SAFARI
22 July 2019
Safari Investments (“Safari”), the Pretoria based low LSM retail property fund, today announced the receipt of a firm intention proposal from Community Property Company (“Comprop”), an unlisted property fund in the Futuregrowth Asset Management stable, to make a R1.8 billion all cash clean offer (“Comprop Offer”) to acquire the entire issued share capital of Safari. The Comprop Offer comes shortly after the recently announced share for share reverse takeover offer by Safari for Fairvest Property Holdings (“Fairvest”).
The fully funded Comprop Offer is proposed to be implemented by way of a scheme of arrangement. Should the scheme be successfully implemented, Comprop will acquire the entire issued share capital of Safari for a cash price of R5.90 per share and Safari will become a wholly-owned subsidiary of Comprop and will be delisted from the JSE.
Comprop believes that the Comprop Offer will provide Safari shareholders with an opportunity to realise significant value for their shares, at a level in excess of what they are likely to otherwise attain in the short to medium-term by remaining listed, even if the Fairvest reverse takeover offer were to be implemented. The Comprop Offer represents:
- A 38.8% premium to R4.25, being the clean price per Safari share as at 19 July 2019;
- A 28.8% premium to R4.58, being the clean 30-day volume weighted average price per Safari share as at 19 July 2019; and
- A 42.2% premium to R4.15, being the implied clean offer price in the Fairvest offer based on an implied swap ratio of 2.22 Fairvest shares for each Safari share.
The proposed acquisition of Safari is a value-enhancing transaction for Comprop investors, and fits well with the long-term strategy of the Comprop portfolio.
The Comprop Offer has been made on the basis that the Safari shares to be acquired by Comprop will be acquired “ex” any entitlement to any distribution for the period from the most recent reporting period to the Scheme’s operative date (“Clean-out Distribution Period”). Accordingly, Safari shareholders will receive a special cash distribution in respect of the Clean-out Distribution Period.
The Comprop Offer has already received considerable support from Safari’s largest shareholders, with Safari shareholders holding or representing approximately 55.7% of Safari’s issued shares irrevocably undertaking to vote: (i) against the Safari shareholder resolutions required to implement the Fairvest reverse takeover offer; and (ii) in favour of the scheme to implement the Comprop Offer.