DURBAN - The Hospitality Property Fund appointed three independent non-executive directors to its board, effective yesterday, following an offer by Tsogo Sun Hotels to acquire all of the ordinary shares with no par value in the issued share capital of Hospitality.
This comes after the two companies reached an agreement at the end of last month on the acquisition, which would lead to the delisting of Hospitality from the JSE.
Hospitality said the appointment of the independent non-executive directors was in compliance with paragraph 3.59 of the listings requirements of the JSE and paragraph 6.39 of the JSE debt listings requirements.
As a result, Hospitality had appointed John Awbrey, Thabo Mosololi and Daniel Smith to its board.
“The board has determined that all of such additional directors are independent for the purpose of the requirements and the companies regulations, and shall serve as the independent board for the purpose of the Tsogo Sun Hotels offer. These appointments were made pursuant to the nomination policy of the company,” Hospitality said.
The independent board is required to consist of a minimum of three independent directors, according to the companies regulations.
Hospitality is required to constitute an independent board in terms of the regulations prescribed by the Minister of Trade and Industry for the purpose of considering the offer by Tsogo Sun Hotels to acquire Hospitality shares.
The acquisition would be settled by Tsogo Sun Hotels by the issue of shares at a ratio of 1.77 Tsogo shares per Hospitality share to be acquired, and the companies have entered into an implementation agreement.
Hospitality says the rationale for the offer is that the nature of the business of Tsogo Sun Hotels and Hospitality are substantially similar and have in-principle the same economic drivers.
“Hotels owned by Hospitality and operated by Tsogo Sun Hotels make up the vast majority of both groups’ economic value. Furthermore, the Tsogo Sun Hotels Group currently own more than 75percent of the issued share capital of Hospitality,” the group said.
The Tsogo Sun Hotels group currently includes two listed companies, both exposed to the hospitality sector and with many interrelated services and offerings.
Hospitality said its shareholders would be able to benefit from a larger and further diversified portfolio of hotels. “The successful implementation of the Tsogo Sun Hotels offer will allow for Hospitality shareholders to benefit from a significant company within the Tsogo Sun Hotels group with complementary assets in addition to Hospitality’s asset holding, and further simplify the Tsogo Sun Hotels Group,” the group said.
The implementation would also simplify Tsogo Sun Hotels’ corporate and operating structure, as Hospitality could become a wholly owned subsidiary of Tsogo Sun Hotels and reduce structural complexity and the costs associated with maintaining two separate listings on the JSE.
Hospitality shares closed 3.95percent higher at R2.58, and Tsogo Sun Hotels shares closed 2.67percent lower at R1.46 on the JSE yesterday.
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