TSOGO SUN GAMING LIMITED - Acquisition of a 50.1% interest in Betcoza

Acquisition of a 50.1% interest in Betcoza

Tsogo Sun Gaming Limited
Incorporated in the Republic of South Africa
(Registration number 1989/002108/06)
Share code: TSG
ISIN: ZAE000273116
(“Tsogo Sun Gaming” or “the Company”)

ACQUISITION OF INTEREST IN BETCOZA

1.    INTRODUCTION AND RATIONALE

      Tsogo Sun Gaming has, through its wholly owned subsidiary, Tsogo Sun Alternative Gaming
      Investments Proprietary Limited (“Alternative Gaming”), concluded an agreement on 7 August
      2020 (“Acquisition Agreement”) with Niveus Investments Limited (“the Vendor”), being a related
      party, in terms of which Alternative Gaming will acquire the entire issued share capital of, and all
      of the Vendor’s claims against, Niveus Invest 9 Proprietary Limited and Cherry Moss Trade and
      Invest 188 Proprietary Limited (“the Sale Equity”), collectively representing a 50.1% interest in
      the Betcoza online betting platform and indirect interests in retail sports betting licences (“the
      Acquisition”).

      The Acquisition represents a strategic opportunity for Tsogo Sun Gaming to enter the online
      betting space via an existing developing business.

2.    NATURE OF BUSINESS

      The Betcoza business is licensed to operate an online betting platform. The retail sports betting
      licences operate in Gauteng and Limpopo.

3.    SALIENT TERMS OF THE PROPOSED TRANSACTION

      Alternative Gaming will acquire the Sale Equity for an aggregate cash purchase consideration of
      R49 million. The purchase consideration will be funded by the Company’s existing facilities.

      The conditions precedent to which the Acquisition was subject, will have been met upon
      publication of this announcement, and the Acquisition will thereafter become immediately
      effective.

      The Acquisition Agreement contains representations by the Vendor in favour of Alternative
      Gaming which are standard for a transaction of this nature.

4.    FINANCIAL INFORMATION

      The value of the net assets comprising the 50.1% interest in the Betcoza online betting platform
      and indirect interests in the retail sports betting licences that are the subject of the Acquisition,
      is R36.7 million. The loss attributable to the net assets that are the subject of the Acquisition
      was R3.5 million for the year ended 31 March 2020. The financial information, prepared in terms
      of International Financial Reporting Standards, is extracted from the unaudited management
      accounts and the Company is satisfied with the accuracy of the information.

5.    CATEGORISATION, SMALL RELATED PARTY CONSIDERATIONS AND INDEPENDENT
      EXPERT’S REPORT

      The Acquisition is considered to be a small related party transaction in terms of the JSE Listings
      Requirements as the Vendor is a wholly owned subsidiary of Hosken Consolidated Investments
      Limited, the major shareholder of Tsogo Sun Gaming.

      Small related party transactions are not subject to shareholder approval provided that the issuer
      has informed the JSE in writing of the details of the proposed transaction and provided the JSE
      with written confirmation by an independent professional expert acceptable to the JSE that the
      terms of the proposed transaction with the related party are fair as far as the shareholders of the
      issuer are concerned.

      The Company appointed Sizwe Ntsaluba Gobodo - Grant Thornton (“SNG”), an independent
      professional expert acceptable to the JSE, to provide its directors with an independent
      professional expert’s opinion regarding the fairness of the Acquisition as required in terms of the
      JSE Listings Requirements.

      Written confirmation has been received from SNG, the independent professional expert, that the
      terms of the Acquisition are fair as far as the shareholders of the Company are concerned
      (“Fairness Opinion”). The Fairness Opinion will lie for inspection at the Company’s registered
      office (Palazzo Towers East, Montecasino Boulevard, Fourways, 2055) for a period of 28 days
      from the date of this announcement.

      The terms of the Acquisition and Fairness Opinion have been considered and approved by the
      non-conflicted directors of the Company.

FOURWAYS
7 August 2020

Sponsor
Investec Bank Limited

Date: 07-08-2020 05:05:00
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