The real fight be­gins

Free float at RAH crimps to less than 4%

Finweek English Edition - - Openers - MARC HASEN­FUSS

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.

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