Tsogo Sun’s planned split into three separate listed entities is aimed at reversing the group’s valuation decline, according to management. CEO Jacques Booysen told Business Day on Thursday the move was intended to "unlock value" for shareholders. Management believed Tsogo’s shares were undervalued, partly because risks to the gaming unit — including a mooted smoking ban — were weighing on the valuations of other business units, he said. Tsogo’s stock has lost about a third of its value since August 2016, having declined from R32 then to R21.37 on Thursday. Listed peer Sun International has declined similarly. Tsogo, which is trading at a price-to-earnings ratio of 9.4 and is majority owned by Hosken Consolidated Investments (HCI), said this week it had begun the process of splitting into three units: hotel management, gaming and property. Tsogo had agreed to transfer seven casino properties, worth R23bn, to its Hospitality Property Fund subsidiary, which it planned to unbundle to s...
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