A battle for ownership of Grand Parade Investments (GPI), with its paired down gambling focus, commenced on Monday after the resorts and casinos company Sun International announced it had snapped up a further 7.8% stake in the firm for R128.2 million.
The shares rose 3.26% to R3.48 on the news.
GPI holds investments in SunWest International; Golden Valley Casino; Sun Slots; a minority investment in Infinity Gaming Africa; and two investment properties.
In a Stock Exchange News Statement on Monday, Sun International (South Africa), or Sisa, said it had bought the equity interest in GPI from Value Capital Partners (VCP).
Sisa recently acquired a 13.3% equity interest in GPI (10.6% of which was announced on SENS on Friday, November 11. The latest purchase of shares increases its stake to 21.1%.
The offer comes hot on the heel of GMB Liquidity Corporation earlier this month making a takeover bid for the firm, after snapping up a 27.8% stake in the group, taking its shareholding to 35.14%.
GMB, a relatively unknown entity in South Africa, is a subsidiary of GMB Investments (GMBI). Gregory Bortz is the sole director and chairperson of both entities. GMBI is a family office platform established by Bortz for investing in South Africa.
GPI said recently that GMBI, through GMB, made a financial investment in horse racing in the Western Cape by financing Kenilworth Racing.
Anthony Clark, an independent analyst at Small Talk Daily Research (@smalltalkdaily) tweeted: “The battle for $JSEGPL Grand Parade heats up with $JSESUI Sun International upping its stake to 21.1% to counter the 35.14% owned by GMB Liquidity Corp. #GPL rallying again & a fat premium to last stated NAV of 265cps trading at 348c.”
Sun International said last Friday, and in line with the company’s stated strategic objective of increasing its equity interest in its portfolio of South African operations where there were minority interests, that Sisa acquired 36 634 218 GPI ordinary shares from VCP, which represented 7.8% of GPI’s issued shares, for a purchase consideration of R3.50 per GPI ordinary share, being R128.2 million in aggregate.
At present, Sun International, through its wholly owned subsidiary, Sisa, holds, inter alia, a 70% equity interest in Sun Slots, a 61.59% equity interest in SunWest International and a 61.4% equity interest in Worcester Casino Proprietary.
GPI owns 15.1% equity interest in Worcester, while Grand Casino Investments Proprietary, a subsidiary of GPI, holds a 30% equity interest in Sun Slots and 15.1% equity interest in SunWest.
"The value of the net assets attributable to the Sale Shares as at 30 June 2022 was R97.2m and the loss attributable to the Sale Shares for the year ended 30 June 2022 was R1.0m. This information has been extracted from GPI’s 30 June 2022 audited annual financial statements,“ Sun International said.
On November 9, GPI announced that GMB would proceed with a mandatory offer to all GPI shareholders to acquire their ordinary shares in GPI not already owned by GMB for a cash consideration of R3.33 per mandatory offer share.
The offer represented a premium of 0.91% on the share price of R3.30 on November 8, and 1.33% on the five-day volume weighted average price up to and including November 8.
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