- February 19, 2010
- Posted by: admin
- Category: Tsogo Sun Holdings
AFTER three years of futile attempts by gaming group Tsogo Sun to take full control of rival Gold Reef, the groups announced yesterday they had agreed on a R2lbn merger, writes Julius Baumann. Despite hostilities of the past, the groups set aside their differences, working late into Wednesday night to thrash out the deal.
The merger will be effected through Gold Reefs acquisition of Tsogo Sun from holding group Tsogo Sun Investments Holdings (TIH) and SAB in exchange for an issue of new shares in Gold Reef. TIH is a subsidiary of HCI, while SAB owns 49% of the shares in Tsogo Sun.
Gold Reef will fund the transaction through the issue of 888,26-million new shares.
Based on Gold Reefs closing price of R19,25 a share the day before the group announced they were in talks, Tsogo Sun is valued at RlThn. Gold Reefs market capitalisation at that price is about R5bn.
The new entity, to be listed on the JSE, will be the 36th-largest group on the stock exchange and one of the world’s larger gaming and leisure groups, with 14 casinos in SA and 90 hotels across Africa and the Middle East.
It will for the first time provide investors direct access to Tsogo Sun’s assets.
Source: BUsienss Day