Related Articles
Top Stories
Feb 12 2012 15:59
Moral hazard, financial weapons of mass destruction, a huge mess - these were the words used by a founder member to sum up the collapse of the Pinnacle Point Group.
Feb 12 2012 15:58
Construction companies are now undertaking a second round of self-examination into uncompetitive behaviour.
Feb 12 2012 14:54
American billionaire George Soros has slammed German Chancellor Angela Merkel, warning that her policies could lead to a repeat of the Great Depression.
Cape Town - Shares in Gold Reef Casinos & Resorts (GRCR) shimmied up 18% to 2690c on Thursday morning following disclosure that rival gaming group Tsogo Sun was in discussions around a potential takeover offer.
A statement from GRCR said discussions were at "a very preliminary stage and there can be no certainty at all that an offer will ultimately be forthcoming".
GRCR was recently subject to a R10bn takeover bid by private equity group Ethos, but the bid folded when gaming board approvals were not secured timeously.
Ethos had pitched a 3 400c/share offer for GRCR, which had been approved by 99.99% of its shareholders.
Some market watchers believed that the delay in securing approval for the deal from the provincial gaming boards offered Ethos an "elegant exit" in light of the fact that gaming shares had been substantially marked down since the offer was pitched in September 2007.
After Ethos' bid folded GRCR shares fell back to around 2 200c on the JSE.
At the time of the Ethos offer it seems Tsogo approached the big three shareholders at Tsogo (The Krok family, Casinos Austria and a BEE consortium) with an offer.
While no offer was officially tabled (according to GRCR), Fin24 understands Tsogo pitched a price 3 450c - but the "offer" was conditional on exclusivity (ie GRCR could entertain n other buyout offers).
The big question now is at what price could Tsogo contemplate pitching an offer. The fall in gaming share values on the JSE probably precludes a price of 3 450c/share being revisited.
A quick canvass of gaming industry insiders suggested 2 800c could be an opportunistic level, while 3 000c/share would probably be more acceptable to professional investors.
One, of course, has to remember that one or two institutional shareholders wee burnt when the original Ethos offer lapsed, which means there could be some resistance to a bid below the initial 3 400c/share level.
One interesting consideration is how Tsogo - if an offer materialises - will get the envisaged deal past the competition authorities.
Tsogo owns Montecasino in Johannesburg, the Suncoast casino in Durban, Hemmingways in East London, the Ridge Casino & Entertainment Resort in Witbank and the Emnotweni Casino in Nelspruit.
GRCR owns the Gold Reef casino, the Golden Horse casino in Pietermaritzburg, the Garden Route casino, the Mykonos casino and the Gold Fields casino in Welkom.
- Fin24