Tsogo Sun’s shares trade erratically after HCI proposal
Tsogo Sun’s share price oscillated between 4% falls and rises on Thursday morning as investors digested the proposal by parent Hosken Consolidated Investment (HCI) to move Niveus’s remaining assets into the casino group.
Neither HCI’s nor Niveus’s share prices reacted to the deal.
Following the sale of its 57.1% stake in wine and brandy maker KWV for R1.15bn to former Del Monte CEO Vivian Imerman’s company Vasari in August and its exhaust manufacturing business Formex for R23.4m to parent HCI in January 2013, Niveus’s remaining operations are Vukani Gaming and Galaxy Bingo.
On Wednesday afternoon, HCI proposed to have Tsogo exchange 160-million of its shares with Niveus’s shareholders for its gambling businesses.
At the R27.36 Tsogo was trading at on Thursday morning, this would value the 160-million shares at about R4.4bn — a slight discount to Niveus’s market capitalisation of R4.5bn.
The deal would leave Niveus with a few properties in Paarl.
"The proposed transaction also constitutes the sale of the greater part of the assets or undertaking of Niveus in terms of section 112 of the Companies Act and will require the approval of the takeover regulation panel and compliance with the provisions of section 115 of the Companies Act," Niveus’s statement said.
Since it is a related party transaction, JSE rules stipulate an independent expert must provide a fairness opinion to minority shareholders.
In Niveus’s interim results released on November 23, it said Vukani operated 5,341 limited payout machines while Galaxy operated 1,886 electronic bingo terminals.
Galaxy also operates the Kuruman Grand Oasis casino in the Northern Cape.
Niveus reported a return to profit of R65m in the six months to end-September from the matching period’s R30m loss.