Niveus to unbundle to its shareholders majority of its gaming business, to be housed in new entity Gameco.

Niveus Investments, Tsogo Sun and Hosken Consolidated Investments (HCI) have restructured a deal previously announced in December last year giving Niveus shareholders more choice with the opportunity to separately retain, dispose of or increase their interest in the gaming business without affecting their current interest in the other assets held by Niveus. This deal in its new form achieves the same end goal of restructuring HCI’s gaming operations under one vehicle, Tsogo. HCI is a material shareholder of both Tsogo and Niveus.

Instead of Tsogo acquiring the gaming businesses of Niveus (namely Vukani Gaming and Galaxy Bingo), the deal has been restructured to allow Niveus to unbundle to its shareholders 93.75% of its gaming business, to be housed in a new entity Gameco, valued at R4.2 billion. HCI has in turn agreed to dispose of its 52.3% stake of the unbundled business to Tsogo valued at R2.2 billion.

Tsogo has further agreed with HCI that it will make a voluntary offer to all shareholders of Gameco to acquire their shareholdings in the gaming business in exchange for Tsogo shares at a ratio of 1 Tsogo share for 2.875 gaming shares. Minorities have a cash based offer alternative but there is a maximum limit to the cash payment of R1.2 billion at a price of R9.74 per share, which equates to R28 per Tsogo share.

It is anticipated that the 6.25% stake (28 750 006 shares) in the gaming business retained by Niveus will be acquired by Tsogo in exchange for 10 million Tsogo shares pursuant to the minority offer.

Vukani is the largest operator of Limited Payout Machines in South Africa and Galaxy is a leading operator of Bingo facilities, it is also the owner of the Grand Oasis casino in Kuruman.

The sale of KWV in 2016 and the unbundling of its gaming business leaves Niveus holding a significant minority stake in Tsogo, property assets including the Laborie wine estate, art works and cash, sparking speculation that HCI may have plans to delist Niveus in the near future.

Source: Moneyweb – Marylou Greig