The real fight begins
Free float at RAH crimps to less than 4%
MATTERS LOOK SET to come to a head between gaming giant Sun International and empowerment partner Grand Parade Investments (GPI) over their respective holdings in casino investment company Real Africa Holdings (RAH).
Just over two years ago Sun International made a hostile takeover bid for RAH (which holds minority stakes in a number of Sun International operated casinos). Sun International, after significant minority resistance, could only muster 60% of RAH.
Earlier this year GPI – which holds major empowerment stakes in SunWest and the new Worcester casino – managed to acquire a 30,6% stake in RAH. Finweek understands (as reported on 2 October: “Some real sharp options”) that Sun International was none too enamoured with developments – which could explain the recent resignation of GPI chairman Hassen Adams from the Sun International board.
However, it seems Sun International hasn’t sat on its hands at RAH. In its latest annual report, Sun International CEO David Coutts-Trotter notes a further 16m RAH shares were bought for R75m. That Sun International has shifted its stake in RAH from 61,3% to 65,7%. If Sun International’s stake is combined with GPI’s holding then 96,3% of RAH is now in the hands of two shareholders.
Coutts-Trotter notes the RAH free float has reduced to 3,7%. “A matter that’s under consideration.”
Naturally, the most obvious course of events would be an offer to remaining RAH minorities. But would Sun International or GPI make the offer? And has either party been accumulating further RAH shares on the open market in recent weeks?
Should RAH be delisted from the JSE, the most intriguing development would be if Sun International and GPI opt to “divide the spoils”. RAH’s assets include a 14,6% stake in the SunWest-owned GrandWest casino (Cape Town), 8,1% of the Boardwalk casino (Port Elizabeth), 13,7% of Sibaya (Durban) and 21,6% of Carnival City (Gauteng). It also has stakes in the national and regional management companies for the various casinos.
As Finweek has postulated before, there must be an opportunity for GPI to swap its RAH stake in exchange for a bigger holding in SunWest or another casino.