The leisure and gaming group said 29581618 Tsogo Sun Hotels ordinary shares were placed with qualifying institutional investors at a price of R4.05 an ordinary share at the closing of the book. It said the placing price represented a 4.5percent discount of the closing price of Tsogo Sun Hotels ordinary shares on Friday, June 21.
The book build comes weeks after the group's separation of the hotel interests culminated in the unbundling and listing of Tsogo Hotels Limited (THL).
Asief Mohamed, the chief investment officer of Aeon Asset Management, said the sale via the book build was a separate decision by the international investors to sell Tsogo Sun, hence the drop in price after the news came out that international investors wanted to sell.
“The unbundling was initiated by the management of the combined entity before the unbundling. In effect, it is two separate decisions by two different decision makers,” he said.
Tsogo Sun Holdings plunged 18.7percent earlier this month as it unbundled its hotel business.
Tsogo’s hotel interests are now housed under one holding company, THL, while Tsogo Sun would house the gaming division - being casino and alternative gaming operations - and renamed Tsogo Sun Gaming.
The group said earlier in the year that given that the gaming and hotel divisions operated in distinctly different markets and services different customers “there are limited opportunities to leverage synergies within the group as a whole”.
The separation was aimed at giving shareholders a greater investment choice and the ability to manage their exposure to gaming and hotel operations respectively. It is also envisaged that the separate listing of THL would provide shareholders with transparent disclosure relating to the operations of the hotel division and allow for the valuation of THL without discounting for gaming-related regulatory risks.