COMPANY COMMENT
Why it’s back to the drawing board for HCI
Despite HCI chief Johnny Copelyn's best efforts, minority shareholders have not been persuaded of the benefits of separating the casino operations from its properties
It was always going to be difficult to persuade the Tsogo Sun minority shareholders to buy into HCI’s plan to sell a chunk of the hotel and gaming group’s properties to Hospitality Property Fund. In the end the R23bn plan had to be abandoned. The share price of both Tsogo Sun and HCI have slipped on this week’s news. HCI is the controlling shareholder in Tsogo with a stake of 47% and is also the largest shareholder in Hospitality. The plan was to sell a portfolio of seven of Tsogo Sun’s casinos and hotel businesses to Hospitality in exchange for shares, which would have resulted in Tsogo ending up with 87% of Hospitality. The deal would also have seen Tsogo split into three separately listed divisions focused on property, gaming and hotel management. However, despite the best efforts of HCI CEO Johnny Copelyn, minority shareholders were not persuaded of the benefits of separating the casino operations from its properties. They believe it would have increased the operating company’s ...
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