| Wed 30 Mar 2005, 16:31 | | Peermont Global"s buy-out of Caesars Gauteng has b |
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Peermont - Peermont Global`s buy-out of Caesars Gauteng has become unconditional
PEERMONT GLOBAL LTD
Registration number 1995/004449/06
Share code: PTG
ISIN: ZAE000058053
(`Peermont`)
Peermont Global`s buy-out of Caesars Gauteng has become unconditional
Caesars renamed Emperors Palace
Peermont Global designs, develops, owns and manages hotel, gaming, convention
and leisure interests. The group has a strong market position in Gauteng where
it operates the Caesars Gauteng Hotel Casino and Convention Resort (`Caesars
Gauteng`). In addition, Peermont Global has a presence in Mpumalanga, Kwa-Zulu
Natal and Botswana, where it has ownership interests and manages the operations
of the Graceland Hotel Casino and Country Club in Secunda, Mondazur at San
Lameer, The Grand Palm Hotel Casino and Convention Resort in Gaborone and
Syringa hotels in Gaborone and Francistown, Botswana.
On 28 December 2004, Peermont Global announced that it had entered into
agreements with Caesars Entertainment Inc (`CEI`) of the USA which would result
in Peermont Global increasing its effective stake in GRER Holdings Ltd (`GRERH`)
to 82.96% from 62.22%. GRERH is the holding company of Global Resorts (East
Rand) Pty Ltd (`GRER`), which operates Caesars Gauteng. In addition, Peermont
Global is increasing its stake in the Caesars Gauteng Management company to 100%
from 50% allowing it to benefit from increased fee income.
These agreements have now been approved by the Competition Commission and the
Gauteng Gambling Board and as a result have become unconditional as of 29 March
2005. The effective date of the transaction is 31 March 2005.
The purchase price amounts to US$145 million plus an escalation of R9,2 million.
The escalation amount is calculated based on the daily escalation rate of R102
740 as stipulated in the transaction agreement dated 23 December 2004, for 90
days. US$29 million of the total purchase price is payable by Peermont Global
and the balance of US$116m plus the escalation of R9,2 million is payable by
GRERH on 31 March 2005.
On 29 March 2005, Peermont Global and GRERH exercised options to acquire US$29
million and US$116 million respectively at a strike price of R5,75 : US$1.
Peermont Global and GRERH acquired these options in December 2004 against
payment of premiums totalling approximately R5,5 million and R21,8 million
respectively. The total purchase price paid will therefore amount to
approximately R843 million (R870,3 million including option premiums), of which
R166,75 million will be paid by Peermont Global and R676,2 million will be paid
by GRERH. The purchase price paid attributable to Peermont Global is
approximately R727,7 million (R751,3 million including option premiums).
Had the purchase price been unhedged and based on an indicative closing exchange
rate of R6,32 : US$1 on 29 March 2005, the purchase price would have amounted to
approximately R925,6 million, of which approximately R183,3 million would have
been payable by Peermont Global and approximately R742,3 million would have been
payable by GRERH. This would have resulted in the purchase price attributable to
Peermont Global of approximately R799,1 million. The acquisition and exercise of
the options thus reduced the attributable price payable (including option
premiums) by approximately R47,8 million.
The transaction includes the termination of the license agreement in terms of
which GRER was entitled to use the `Caesars` name. As a result Caesars Gauteng
has been renamed Emperors Palace but the Roman theme remains unchanged.
Ernie Joubert, CEO of Peermont Global said: `The new name had to be as grand as
the complex, capturing the look and feel, but still as strong and powerful as
its predecessor, symbolizing all that our guests and customers have come to love
and respect in the resort.`
The names of the underlying Peermont Global Group companies with direct
ownership in Emperors Palace as well as the name of its management company will
also change as part of the re-branding process; GRER, GRERH and Caesars Global
Resorts Management will be renamed Peermont Global (East Rand), PGER Holdings
and Peermont Global Management (East Rand) respectively.
Peermont has also developed its own collection of brands for all hotel
categories and star ratings. To fit in with the group`s hotel branding strategy,
the Senator Hotel will be re-branded the Metcourt Laurel and the Emperor Hotel
will be rebranded the D`oreale Grande.
Ernie Joubert commented further: `This is an important milestone for the
Peermont Global Group and its BEE partner Marang East Rand. We are confident
that Emperors Palace will reach new heights under its new ownership structure
and its majestic new name. The legendary standards of innovation, product
quality, service excellence, value for money and continuous excitement that the
Resort has become known for will live on under the new name Emperors Palace.`
Enquiries:
PeermontGlobal 011 267 9200
Ernie Joubert, CEO 011 267 9207
Anthony Puttergill, FD 011 267 9209
College Hill 011 447 3030
Johannes van Niekerk 082 921 9110
Nicola White 083 293 1146
Bryanston
30 March 2005
Merchant bank and lead sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)
CORPORATE FINANCE
Background notes
Peermont chose the name Emperors Palace in order to celebrate the height of the
Roman Empire under the rule of a succession of illustrious Emperors.
The Roman Republic period came to an end after the assassination of Julius
Caesar on 15 March 44 BC. His successor, Augustus, was the first Emperor of the
Roman Empire period. Under Emperor Augustus and all the Emperors after him, the
Roman Empire grew from strength to strength in terms of architecture and urban,
political, economic, social and infrastructure reform and development.
The roads, built for commercial and military purposes, formed a vast network
covering the entire empire, connecting the provinces with one another and with
Rome. At this stage, Rome was majestic and the Empire never stronger.
Emperors Palace Hotel, Casino and Convention Resort (formerly Caesars Gauteng)
was designed and developed by the Peermont Global team under the direction of
Founder and Chief Executive Officer, Ernie Joubert, during the period June 1998
to November 2000 at a capital cost of R1,25 billion. The resort is located
adjacent to the Johannesburg International Airport. Peermont Global also
assumed day-to-day operating management responsibility for the resort since
inception whilst CEI (which never employed any staff in South Africa) shared
that responsibility in an overseeing role.
Date: 30/03/2005 03:47:11 PM
Produced by the JSE SENS Department
