BNS Nominees v Arrowhead Properties
BNS Nominees (RF) (Pty) Ltd v Arrowhead Properties Ltd [2022] ZAGPJHC 848; 2023 (1) SA 478 (GJ) is a Johannesburg High Court judgment (Manoim J) concerning section 164 appraisal rights in a property company scheme of arrangement. The case was brought by Albie Cilliers through his vehicles BNS Nominees and Breede Coalitions against Arrowhead Properties. Crucially, Cilliers lost on the merits: the court found that the company’s offer of R3.75 per share represented fair value and dismissed the application to appoint appraisers. The court rejected NAV (R6.90/share) as the sole or determinative measure of fair value for a REIT, instead offering a tentative definition: “fair value is the value a share would realise in an undistorted market, in the medium term, with free interaction between buyers and sellers with proper information, and without any exceptions being made for minority holdings or the effect of the corporate action which has led to the dissent.” However, the court upheld appraisal arbitrage as legitimate (rejecting the “profiteering” label), confirmed a shareholder may exercise appraisal rights even after acquiring shares post-announcement, and established that courts must determine fair value on the specific facts. Cilliers also succeeded in an earlier 2018 case (La Concorde Holdings) establishing that holding company shareholders can exercise appraisal rights where a subsidiary proposes to dispose of substantially all its assets. The combination of these precedents — not a clean Cilliers win, but a framework he can work within — informs his potential s164 strategy against the 47c AttBid offer.
Connections
- Albie Cilliers — plaintiff; brought through BNS Nominees
- BNS Nominees — plaintiff vehicle
- RMH Holdings — the ruling’s appraisal framework is directly applicable to the AttBid offer
- TRP (Takeover Regulation Panel) — regulatory complement; TRP can adjust prices, court can award NAV-based compensation