Coro­na­tion now owns 15 per­cent of Hosken

The Star Early Edition - - COMPANIES - Sandile Mchunu

CORO­NA­TION Fund Man­agers has in­creased its share­hold­ing in em­pow­er­ment in­vest­ment firm Hosken Con­sol­i­dated In­vest­ments (HCI) to 15.08 per­cent by ac­quir­ing or­di­nary shares in the com­pany.

Coro­na­tion is now the sec­ond-big­gest share­holder in HCI. The South African Cloth­ing and Tex­tile Work­ers Union holds 36.71 per­cent.

Coro­na­tion in­creased its share­hold­ing in HCI from 1.07 per­cent to 5.48 per­cent at the be­gin­ning of this year.

“The most com­pelling rea­son to buy HCI is for its hold­ing in Tsogo Sun, which makes up the ma­jor­ity of its net as­set value. Based on val­u­a­tion mul­ti­ples, buy­ing into HCI pro­vides a cheaper en­try into Tsogo Sun, due to the dis­count af­forded to hold­ing com­pa­nies to their net as­set val­ues,” Nol­wan­dle Mthombeni, an in­vest­ment an­a­lyst at Mer­gence In­vest­ment Man­agers, said.

She added: “Coro­na­tion likely has an in­vest­ment case re­gard­ing the un­lock­ing of the value of Tsogo Sun, which trades be­low its in­trin­sic value, and have cho­sen to make the in­vest­ment through HCI, rather than own­ing Tsogo Sun di­rectly. The re­main­der of the as­sets in HCI are far less at­trac­tive com­pared to the Tsogo Sun hold­ing.”

HCI, which is worth more than R12 bil­lion, has a 43-per­cent con­trol­ling stake in Tsogo Sun.

In Septem­ber 2016, Tsogo Sun and Hos­pi­tal­ity Prop­erty Fund (HPF) an­nounced a merger be­tween the two com­pa­nies. As part of the trans­ac­tion, Tsogo Sun ac­quired a con­trol­ling stake in Hos­pi­tal­ity by vend­ing a port­fo­lio of 10 ho­tel prop­er­ties in ex­change for the is­sue of Hos­pi­tal­ity or­di­nary shares.

Coro­na­tion’s shares rose 0.29 per­cent on the JSE to close at R68.11 yes­ter­day. HCI was up 2.69 per­cent to close at R133.50.

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