JOHANNESBURG - Hotel and gaming group, Tsogo Sun, on Monday ditched its proposed disposal of seven mixed-use casino properties to Hospitality Property Fund, and the subsequent distribution of the group's entire holding of Hospitality shares to Tsogo shareholders after some investors did not support the transaction.
In July, Tsogo Sun said it would sell a portfolio of seven of its casino and hotel businesses to Hospitality Property Fund in a shares-and-subscription deal worth R23 billion, in line with the board's strategy to restructure the group into three separate and distinct operating divisions: a property division, a gaming division and a hotel management division.
A general meeting held last month to pass the special resolutions in September was adjourned by the chairman and a new date was set for November 12.
Tsogo Sun had proposed to sell 100 percent of the issued share capital in Cassava and Listed -- owners of the Casino Precinct Properties -- to Hospitality while subscribing more than one billion Hospitality shares which would leave Tsogo Sun holding about 87 percent of the shares in Hospitality.
At a reconvened general meeting on Monday, shareholders were advised that it had become apparent that the transaction and the unbundling did not enjoy the support of sufficient shareholders for their implementation, following engagement with certain Tsogo investors.
"Accordingly, the Tsogo board of directors had withdrawn the resolutions that were to have been considered at the reconvened general meeting and the sale of shares and subscription agreement was terminated by agreement between Tsogo, Hospitality and the remaining parties to that agreement. As such, no resolutions were proposed for consideration at the reconvened general meeting and the meeting terminated."
Tsogo Sun revealed earlier this year that its investment spending in the year to March had declined to about R3.25 billion, including the purchase of Gameco in exchange for shares and R1.7 billion in cash.
- African News Agency (ANA)