Century jackpot for Tsogo Sun

Posted On Tuesday, 21 April 2009 02:00 Published by
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Tsogo Sun Gaming’s R490m acquisition of Century Casinos is expected to further consolidate the gaming sector and strengthen the group’s growing portfolio of gaming assets.

JULIUS BAUMANN

Aviation and Tourism Editor

TSOGO Sun Gaming’s R490m acquisition of Century Casinos is expected to further consolidate the gaming sector and strengthen the group’s growing portfolio of gaming assets.

The transaction will likely clear an important regulatory hurdle today when the Competition Tribunal is expected to approve the deal.

The acquisition followed a bidding process in which Tsogo subsidiary Main Street 581 bought Century Casino’s 100% stake in Caledon Spa & Casino in the Western Cape and a 60% interest in Century Casino & Hotel in Newcastle, KwaZulu-Natal, as well as the 40% Century did not own in the Newcastle property.

Century put its South African assets on sale in September last year when it decided to exit the local market.

This leaves the South African market dominated by four groups — Peermont, Tsogo, Gold Reef Casino Resorts and Sun International — with London Clubs International owning Gauteng’s Emerald Casino Resort.

The Century deal caps a busy year for Tsogo in which the group increased it stake in Gold Reef to 23%, giving it 33% of the voting rights.

Last October two Gold Reef empowerment directors, Bongani Biyela and Richard Moloko, sold their 41-million shares to Main Street 581, a transaction that has received the approval of both the Gauteng and KwaZulu-Natal gambling boards. The Western Cape, the Eastern Cape and the Free State boards are still to decide on the matter. “We are confident that if the Gauteng and KwaZulu-Natal boards approved the transaction, so will the others,” Marcel von Aulock, strategic planning director at Tsogo, said yesterday.

Meanwhile. Tsogo has continued to snap up Gold Reef shares on the open market. However, Von Aulock said the group would not buy more shares in Gold Reef as this would trigger an all-out offer for Gold Reef which was likely to be rejected.

“Casinos Austria and the Krok family together hold more than 40% of the company and would almost certainly oppose our offer. Therefore there is little point going beyond what we already have.”

With no new gaming licences on offer and few other opportunities to consolidate the gaming sector in SA, Tsogo will instead focus on organic growth.

This year Tsogo, which also owns Southern Sun Hotels, is to spend R1,5bn on hotel and other projects. One of the bigger projects is a mixed-use development being built on land adjacent to its flagship property Montecasino, which will include a four-star Southern Sun Hotel.

Von Aulock expects Tsogo to have doubled in size in the next few years once all the projects and acquisitions have been bedded down, without burdening the group with debt. This will no doubt please its shareholders who last year cashed in R1bn in dividends.

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Source: Business Day


Publisher: I-Net Bridge
Source: I-Net Bridge

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