Listed gaming and hotel group Gold Reef Casino Resorts has ended talks with brewing giant SABMiller over its acquisition of SABMiller’s 49% stake in fellow gaming group Tsogo Sun Holdings, Gold Reef said in a statement on Monday.
According to Gold Reef, SABMiller said its stake in Tsogo Sun is not for sale, after Gold Reef had submitted an expression of interest to the company regarding the holding.
Gold Reef had determined an indicative equity value of SABMiller’s Tsogo Sun stake at approximately R4-billion on January 1 2006, it added.
SABMiller had previously stated that its shareholding in Tsogo Sun was not core to its operations, therefore indicating it was up for sale.
“In order to submit a firm offer to SABMiller for its interest, Gold Reef requested certain information from SABMiller to finalise its indicative valuation and to carry out a high-level due diligence,” Gold Reef elaborated.
“In response, SABMiller has notified Gold Reef that it is not a seller of its 49% interest in Tsogo Sun and therefore discussions between Gold Reef and SABMiller have ceased.”
Gold Reef also revealed that it has subsequently sold its 9,9% stake in Johnnic Holdings, which it had purchased in order to gain an indirect interest in Tsogo Sun Holdings. This had resulted in a net profit of R20-million for Gold Reef.
SABMiller spokesperson James Crampton said on Monday that, following the expression of interest from Gold Reef, SABMiller had conducted a close assessment of its holding in Tsogo Sun, and had determined that it was “inappropriate” to sell it over the short to medium term on a value basis.
However, the group still considers the Tsogo Sun stake to be non-core to its operations, he affirmed. — I-Net Bridge