Safari Investments to consider fairness of Heriot offer

ON Friday Heriot said it intended to make a general offer to Safari shareholders, of R5.60 cash for every Safari share.

ON Friday Heriot said it intended to make a general offer to Safari shareholders, of R5.60 cash for every Safari share.

Published Jun 8, 2022

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SAFARI Investments RSA’s board said yesterday Heriot Properties had firmed its intention to acquire Safari “unilaterally” after “unsolicited” terms were handed to Safari’s board.

Heriot Properties acquired 32.2 percent of Safari Investments last year, and had indicated subsequently that it wished to acquire more shares over time. The parties had jointly also obtained Competition Commission approval for such a merger.

On Friday Heriot said it intended to make a general offer to Safari shareholders, of R5.60 cash for every Safari share.

Safari’s shares gained 2.68 percent to R5.75 on the JSE yesterday. The rarely traded share has risen over 10 percent from the close on Thursday, prior to Heriot’s announcement on Friday of its firm intentions.

Heriot owns a retail, industrial, commercial and specialised portfolio of 43 properties in South Africa worth some R4.7 billion.

Safari holds nine mainly retail focused properties worth R3.5bn.

Safari’s board said the offer had not been extended to treasury shares, and was thus not made to Southern Palace Capital (SP Safari Shares), which holds 53 million Safari shares.

“Safari has a pledge and cession, and other direct and indirect security rights, over the SP Safari Shares, which Safari holds as security for amounts owing by Southern Palace to it,” the board said.

“The Independent Board does not express any view or recommendation on the merits or otherwise of the offer at this stage,” it added.

An independent expert would be appointed to issue an opinion and report on the offer.

Safari is expected to release its results for the year to March 31, 2022, around the end of June, but the company said in a pre-close update that while its operating environment was challenging, the operational performance of the portfolio was in line with guidance communicated to shareholders.

“The company’s focus on food-anchored convenience shopping centres in mainly semi-urban areas has proven again to be a key factor in the defensive nature and financial stability of its portfolio…improvements were evident in all key trading metrics of the portfolio, in particular increased tenant turnover and trading densities.”

In the 11 months to February 2022 the retail portfolio showed a collection rate of 98 percent of contractual billings.

Heriot, meanwhile, in its results for the six months to December 31, said its earnings had been enhanced by the acquisition of Safari shares - Heriot’s distributable earnings for the period of R128.8m or 50.42 cents per share, were 15 percent ahead of the comparable period in 2020.

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