| Thu 18 Feb 2010, 10:07 | | GDF - Gold Reef Resorts Limited - Press Release - Merger of Gold Reef and Tsogo |
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GDF
GDF
GDF - Gold Reef Resorts Limited - Press Release - Merger of Gold Reef and Tsogo
Gold Reef Resorts Limited
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
Share code: GDF & ISIN: ZAE000028338
MERGER OF GOLD REEF AND TSOGO
Creation of a pre-eminent gaming and hotel company in South Africa
Gold Reef Resorts Limited ("Gold Reef") and Tsogo Sun Holdings (Pty) Limited
("Tsogo") have entered into an agreement to merge their respective gaming and
hotel businesses. The proposed merger will be effected through an acquisition by
Gold Reef of the Tsogo shares held by Tsogo Investment Holding Company (Pty)
Limited ("TIH") and SABSA Holdings (Proprietary) Limited ("SABSA") in exchange
for the issue of new Gold Reef shares to form a merged company, which will be
listed on the JSE Limited.
The merged company will be a pre-eminent gaming and hotel company in South
Africa and have a significant ranking, by market capitalisation, amongst listed
emerging market peers in the Europe, Middle East and Africa region. Gold Reef
shareholders and investors will gain direct access to Tsogo`s quality gaming and
hotel assets. All shareholders will benefit from the geographical and market
segment diversification of the merged company.
Steven Joffe, CEO of Gold Reef said:
"This merger gives Gold Reef shareholders direct access to Tsogo`s attractive
portfolio of assets. It creates a company of significant scale and
diversification across geographies and markets. As a larger and stronger
company, we will be well positioned to pursue attractive growth opportunities in
new markets."
Gold Reef will issue circa 889 million new Gold Reef shares as consideration for
the acquisition of Tsogo resulting in TIH and SABSA, the current Tsogo
shareholders, owning 41.3% and 39.7% in the merged company respectively, with
the remaining 19% being held by the current Gold Reef shareholders. Based on
the closing price of R19.25 per Gold Reef share on Friday, 29 January 2010,
being the last trading day prior to the release of the Gold Reef cautionary
announcement, this implies a value of R17.1 billion for Tsogo. The merged
company will therefore have an expected market capitilisation of about R21
billion.
Gold Reef shareholders on the register on the dividend record date will be
entitled to receive the final dividend of not more than 65 cents per Gold Reef
share in respect of the year ended 31 December 2009 to be declared on or about
Monday, 29 March 2010.
The merger is dependent on the fulfillment or waiver of certain conditions prior
to implementation including inter alia the passing of various resolutions by the
Gold Reef, TIH and HCI shareholders in general meetings as well as the approvals
of the Competition Authorities and relevant Gambling Boards. A circular
containing full details of the proposed merger will be posted to Gold Reef
shareholders in due course.
Due to Tsogo`s material shareholding in Gold Reef, an independent opinion
relating to the fairness of the terms and conditions of the proposed merger is
required. Gold Reef has appointed Grant Thornton to provide this fairness
opinion. On a preliminary basis, Grant Thornton has advised that the terms and
conditions of the proposed merger are fair to Gold Reef shareholders.
The board and management of the merged company are currently under consideration
and further details will be published in the circular. No redundancies at the
operational level are expected from the merger.
Jabu Mabuza, CEO of Tsogo, said:
"This transaction heralds the creation of a significant entity in the gaming and
hotel industry and in corporate South Africa. The merger of two quality
portfolios and listing on the JSE provides investors with exposure to
diversified markets and geographies. We will look to capitalise on the new
growth opportunities that this merger brings."
Steven Joffe concluded:
"We believe this transaction is a great outcome for our shareholders to
participate in a larger and more diversified group. It opens up a number of
growth opportunities as well as improves access to capital and new talent. It is
a win-win outcome for all concerned."
Enquiries:
Gold Reef 011 248 6800
Steven Joffe, CEO
Tsogo Sun 011 510 7500
Jabu Mabuza
College Hill 011 447 3030
Nicholas Williams 082 600 2192
Suzanne Jefferies 082 815 1812
Notes to Editors
Gold Reef: Gold Reef is a gaming and entertainment company that operates
resorts and entertainment complexes throughout South Africa. Gold Reef has an
interest in the following resorts (Gold Reef percentage ownership is indicated
in brackets):
Gold Reef City Casino and Theme Park, Gauteng (100.00%)
Silverstar Casino, Gauteng (100.00%)
Golden Horse Casino, KwaZulu-Natal (100.00%)
Goldfields Casino, Free State (100.00%)
Garden Route Casino, Western Cape (85.00%)
Mykonos Casino, Western Cape (70.36%)
Queens Casino, Eastern Cape (25.10%)
Gold Reef generated R1.1 billion in revenue and R0.4 billion in earnings before
interest, tax, depreciation, amortisation and rentals ("EBITDAR") for the six
months ended 30 June 2009.
Gold Reef is listed on the securities exchange operated by the JSE with a market
capitalisation of R5.3 billion (excluding treasury shares) as at Friday, 29
January 2010.
For more information visit www.goldreefresorts.com
Tsogo: Tsogo is a hotel, gaming and entertainment company with operations
throughout Africa, the Middle East and the Seychelles. Tsogo`s operations are
held through two wholly-owned subsidiaries, Tsogo Sun Gaming (Proprietary)
Limited, representing Tsogo`s gaming interests, and Southern Sun Hotels
(Proprietary) Limited ("Southern Sun"), representing Tsogo`s hotel interests
(collectively the "Tsogo Group").
Tsogo Sun Gaming has an interest in the following resorts (Tsogo`s percentage
ownership is indicated in brackets):
Montecasino, Gauteng (100.00%)
Suncoast Casino and Entertainment World, (73.50%)
KwaZulu-Natal
The Ridge Casino, Mpumalanga (100.00%)
Emnotweni Casino, Mpumalanga (100.00%)
Caledon Casino, Western Cape (100.00%)
Century Casino, KwaZulu-Natal (100.00%)
Hemmingways Casino, Eastern Cape (80.00%)
Southern Sun is one of the largest hotel groups in South Africa and is also one
of the largest timeshare operators in South Africa. By the end of 2010, the
Tsogo Group expects to operate 90 hotels with 14,438 rooms in 9 countries across
Africa and the Middle East. Southern Sun is the only South African hotel group
to operate across the deluxe to budget segments of the hotel market with brands
including Southern Sun Garden Court, Sun Square and StayEasy.
For the six months ended 30 September 2009, Tsogo generated revenue of R2.9
billion and EBITDAR of R1.1 billion.
For more information visit www.tsogosun.co.za
Johannesburg
18 February 2010
Financial adviser and sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 18/02/2010 10:07:40 Produced by the JSE SENS Department.
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