By Buddy Naidu Presidential hopeful Tokyo Sexwale has joined forces with a key financial backer of ANC deputy president Jacob Zuma to take over one of the country's biggest casino groups.

Sexwale and Durban-based businessman Vivian Reddy have launched a bid for Gold Reef Resorts Limited in a deal estimated to be worth R10-billion.

Gaming and entertainment company Gold Reef Resorts lists among its assets Gold Reef City Casino and Theme Park in Johannesburg and the Golden Horse Casino in KwaZulu-Natal, as well as the world renowned Apartheid Museum.

Business Times has established that Sexwale's Mvelaphanda Group Limited has formed a joint venture with Reddy's Edison Corporation.

During the Durban High Court trial of fraudster Schabir Shaik, it emerged that Reddy contributed towards paying off Zuma's R1- million bond on his traditional home, Nkandla. Reddy is known to be a supporter of the former deputy president?s bid to become president in 2009.

Sexwale and Reddy have presented Gold Reef Resorts with an offer to purchase in writing - a move likely to draw favour from shareholders as the government tightens its grip on the gaming industry.

Statistics show that South Africans spend at least R12-billion a year gambling, and government views this as a social problem.

On Friday, the Mvelaphanda group chief executive Yolanda Cuba, who represents the company in the deal, refused to comment.

But Gold Reef Resorts CEO Steven Joffe confirmed that the company had received expressions of interest from parties in SA, the US and Australia.

"There has been huge interest from various parties that I am, at this point, unable to name. But we have now narrowed the list down to three or four groups. This is, of course, testimony to the regulatory environment in South Africa and the general economy."

He said the bidders would commence due diligence checks.

He said Gold Reef Resorts had in early May appointed US-based merchant bank Merrill Lynch to source offers for the company worldwide, should investors want to sell.

"Again, I cannot comment on specific bidders."

It had been previously reported that while the company is not desperate to sell, a vote would be held within months on takeover proposals by several unidentified parties.

At the time, company chairman Maxim Krok said formal bids had yet to be received.

Business Times has established that other interested buyers may include the late Australian tycoon Kerry Packer's company, Publishing and Broadcasting Limited, as well as Harrah's Group, which owns casinos all over the US, including the world-renowned Caesar's Palace which it bought for over 5-billion in 2004.

In March, Reddy was one of several black partners to acquire a 25% stake in Gold Reef Resorts.

But it is understood that Reddy and Sexwale's bid makes provision for the inclusion of other empowerment partners in Gold Reef.

On Friday, Reddy, a self-made tycoon, refused to comment on the deal, saying it involved "ongoing business negotiations".

"If there is any comment to be made, it will be done so at the appropriate time."

Other assets of Gold Reef Resorts, a listed company, include controlling interests in Casino Mykonos near Cape Town, Garden Route Casino in Mossel Bay and Goldfields Casino in Welkom.

The company also holds a lucrative licence - the last to be awarded in Gauteng - for a new casino and resort to be built on the West Rand.

It is also part of the consortium of the preferred bidder for the Queenstown casino licence in the Eastern Cape, through a 25% stake in Lukhanji Leisure.

Reddy, meanwhile, already has interests in three casinos in KwaZulu-Natal and enjoys a close working relationship with the Sun International group, in whose Sibaya Casino on the North Coast he holds shares.

He used to be a shareholder in two Gold Reef casinos before becoming part of the March empowerment deal, and is the majority shareholder in the Century City Casino in Newcastle.

Recently he secured a casino licence in India.

He and business partner, former cricketer Kapil Dev, and other Indian investors want to build a R1-billion hotel and casino complex in the state of Sikkim, in northeast India, which connects the subcontinent with China.

Should Gold Reef's shareholders give the go-ahead to the planned purchase, it will make Reddy one of the most powerful casino operators in the country.

Reddy has in the past made no bones about the fact that he is one of Zuma's close friends and financial backers - and that he supports Zuma's bid for the presidency.

Business Times