Johannesburg – Tsogo Sun, Africa’s biggest hotel and gambling firm, will sell 10 hotel properties to Hospitality Property Fund in exchange for shares, the two companies said on Wednesday.

The deal, which is agreed in principle, will increase Tsogo’s stake in Hospitality to more than 50 percent from 27 percent.

If the deal is finalised, Hospitality would lease the properties back to Tsogo’s brands.

Tsogo has been evaluating options for its property portfolio, which also includes shopping malls and office blocks, to focus on its mainstay casino and hotel services business.

The final terms of the deal will be subject to approval by Hospitality’s shareholders, the companies said.

Tsogo is due report its half-year results on Thursday, which are expected to show an increase of as much as 10 percent in adjusted headline earnings per share (EPS).

Headline EPS, a profit measure that strips out certain one-off items, is widely used in South Africa.

Source: Business Report -Reuters