Update On The Proposed Disposal And Further Cautionary Announcement
TSOGO SUN HOLDINGS LIMTED
(Incorporated in the Republic of South Africa)
(Registration number 1989/002108/06)
Share code: TSH ISIN: ZAE000156238
(“Tsogo” or “the Company” or “the Group”)
UPDATE ON THE PROPOSED DISPOSAL OF CERTAIN TSOGO CASINO, HOTEL AND OFFICE
PROPERTIES TO HOSPITALITY PROPERTY FUND LIMITED, PROPOSED DIVISION OF TSOGO INTO A
GAMING DIVISION, HOTEL MANAGEMENT DIVISION AND PROPERTY DIVISION AND FURTHER
1. Update on the Proposed Disposal to Hospitality Property Fund Limited
Shareholders are referred to the cautionary announcements released on SENS on Friday, 2 March 2018 and
Wednesday 18 April 2018 regarding the proposed disposal of certain casino precinct properties to Hospitality
Property Fund Limited (“HPF”) (the “Proposed Transaction”).
The Group is pleased to announce that negotiations on the Proposed Transaction are progressing well and the
Group expects to publish the detailed terms of the Proposed Transaction and the anticipated timetable shortly. If
approved by Tsogo shareholders and subsequently implemented, the Group will have transferred a significant
portion of its casino real estate assets to HPF. This follows the two strategic transactions concluded in 2016 and
2017, whereby a significant portion of the Group’s hotels properties were transferred to HPF. On conclusion of the
Proposed Transaction, HPF is expected to own investment property with a fair market value of approximately R35
2. Proposed Division of Tsogo into a Gaming Division, Hotel Management Division and Property Division
In addition to the Property Division, the Group comprises of two other distinct operating divisions –
- Gaming Division
Tsogo Sun Gaming is a gaming focused operating company with an unrivalled portfolio of traditional land-
based casino operations, and exciting growth businesses in alternative gaming operations, consisting of
Galaxy Bingo and the Vukani Limited Pay out operations.
- Hotel Management Division
Southern Sun Hotels is a hotel management company with a portfolio of over 90 hotels under
management spread across the industry spectrum, from deluxe to budget, operating throughout South
Africa, Sub-Saharan Africa, the Seychelles and the United Arab Emirates.
These divisions have retained limited property assets for strategic reasons, resulting in an asset light business
across both divisions.
Whilst these divisions have grown together, they operate in distinctly different markets and service different
customers and thus provide limited opportunities for synergies. The Group anticipates that the separation of Tsogo
into these three focused divisions, comprising gaming operations, hotel operations and property will unlock value
and provide greater investment choice for Tsogo shareholders.
Shareholders are advised to take note that, as a further step to achieving the abovementioned value unlock, Tsogo
intends to unbundle the Southern Sun Hotels operation into a separate JSE listing. The board is pleased to
announce that the previous Group Chief Executive Officer, Mr Marcel von Aulock, has agreed to join the hotel
division as Chief Executive Officer with effect from 1 June 2018, and is tasked, inter alia, with achieving the
unbundling and listing of Southern Sun Hotels. This will then culminate in the separate listing of the hotel, property
and gaming businesses with all three resultant entities remaining subsidiaries of the HCI Group, which includes
several additional listed and unlisted companies.
3. Further Cautionary Announcement
Tsogo shareholders are advised to continue to exercise caution when dealing in Tsogo securities until a further
announcement is made.
31 May 2018
Corporate advisor and transaction sponsor to Tsogo
Investec Bank Limited
Corporate Law Advisor to Tsogo
Taback and Associates Proprietary Limited
Date: 31/05/2018 05:30:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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