File picture: James White

CAPE TOWN – Comprop, the unlisted shopping centre group, has accused the board of Safari Investments of taking a negative view of Comprop’s offer to buy the listed group. 

“Comprop finds it perplexing that the Safari board could propose a transaction at R4.15 (the effective price of a previous terminated merger proposal between Fairvest and Comprop earlier this year), but not propose the Comprop offer at an effective R5.90. We struggle to comprehend how this position is in the interests of Safari shareholders,” Comprop said in an update on its offer yesterday.

Comprop said several engagements with Safari took place to find out why the offer was not announced to shareholders. 

Safari, in the interim, announced that the Comprop offer was unlikely to be approved by shareholders after it obtained letters of intent from more than 25 percent of its shareholders saying they would oppose the offer.

But Comprop argued it had been “inappropriate” for Safari to canvass shareholders on how they would vote before appointing an independent expert adviser to ascertain whether the Comprop offer was fair and reasonable.

“In Comprop’s opinion, and that of a number of Safari's shareholders, Safari should publish (the offer for Safari) without further delay and should work together with Comprop to issue a circular to Safari shareholders,” Comprop said.

The firm described the board’s belief that more than 25 percent of Safari shareholders might vote against the scheme as “unsubstantiated”. 

Comprop said its offer had been supported by shareholders holding more than 55.7 percent of Safari’s shares. The offer represents a 38.8 percent premium to the price per Safari share at July 18, 2019, the day before Comprop announced its bid, and a 28.5 percent premium to the 30-day average share price of Safari to that date. Safari’s share price rose 3.6 percent to R5.18 yesterday afternoon.

Comprop said it supported various Safari shareholders who now demanded that the Safari board publish the letters of intent from the opposing shareholders, and warned that it might have to consider withdrawing its bid, which would represent a R500 million loss to Safari shareholders.

“Comprop believes the letters of intent are not legally enforceable” and did not constitute legal grounds for the Safari board not to proceed with the publication of Comprop’s offer.