ROBERT LAING

MONTECASINO owner Tsogo Sun is likely to bag Gold Reef Resorts after a private-equity buyout deal was taken off the table yesterday.

Faced with accusations of cheating by the JSE’s takeover watchdog, the Securities Regulation Panel (SRP), Gold Reef’s directors chose to cancel the R34 a share, or R9.85-billion, buyout deal offered by a consortium of Gold Reef management, Ethos Private Equity and Wall Street’s Goldman Sachs.

JSE takeover rules prevent the consortium making another offer for Gold Reef within a year, leaving Tsogo Sun’s higher bid unopposed.

The Times revealed on Friday that Gold Reef’s private-equity buyout was about to be called off.

After we reported that the consortium wanted to dissociate itself from the growing scandal surrounding the deal, Gold Reef issued a statement saying the deal was off because of a technical difficulty.

This was after the SRP withdrew its approval on Friday, saying a re examination of the deal showed it fell foul of four takeover rules.

Gold Reef’s directors claim that Tsogo’s R34.50 a share rival bid was not put on the table.

Gold Reef’s share leapt more than 7percent to hit a high of R26 as punters bet that Tsogo’s offer would be accepted, but the share later settled back to R25.

Yesterday was the deadline set by Gold Reef’s directors for gaining approval for the buyout from the Gauteng Gambling Board.

Though extending the deadline would have been little more than a formality, Gold Reef’s directors chose to let the deal lapse.

Lucky Lukhwareni, the Gauteng Gambling Board’s spokesman on legal matters, said: “Our verdict hasn’t been made simply because we were waiting for the Securities Regulation Panel report.

“We heard that the panel withdrew its approval. We are now waiting for a formal communication from them informing us of this. We will then convene a board meeting [at which] a determination will be made.”

Richard Connellan, executive director of the SRP, said the takeover watchdog decided to review its approval of Gold Reef’s private-equity deal after reading of the allegations Tsogo Sun had made at hearings of the Gauteng Gambling Board.

The panel said on Friday that it was withdrawing its approval of Gold Reef’s plans. It will take several weeks before the panel makes known its reasons in full, but has said the deal falls foul of JSE rules 13, 16, 19 and 20.

Rule 13 prohibits preferential offers being made to only some shareholders. Tsogo Sun accused Gold Reef chairman Maxim Krok of gaining R12-million by accepting BidCo’s lower offer. Krok’s office said he was not available for comment.

Rules 16 and 20 relate to disclosure. Gold Reef shareholders were said not to have been properly informed about Tsogo’s offer before giving it their support.

Rule 19 refers to frustrating a takeover offer. This could relate to Gold Reef’s claim that “at no stage … did the board receive an offer of R34.50 a share from Tsogo”.

Source: The Times