Grand Parade Investments (GPI), which mainly holds gaming assets after streamlining its portfolio to return to a positive financial footing, announced that GMB Liquidity Corporation had made a takeover bid for the firm after increasing its stake.
Last month, GMB Liquidity Corporation snapped up a 27.8% stake in the group, but GPI said GMB had hiked its stake to 35.14%.
GPI holds investments in SunWest International, the Golden Valley Casino, and SunSlots, a minority investment in Infiniti Gaming Africa and two investment properties.
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.
GPI shares closed up 0.91% at R3.33 on the JSE on Wednesday. The shares in the firm, with a market cap of R1.55 billion, have risen 25% in five years.
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.
GPL said recently GMBI, through GMB, made a financial investment in horse racing in the Western Cape by financing Kenilworth Racing.
GMB said it believed that GPI would benefit from its support as the key shareholder.
GMB does not intend to apply for the delisting of GPI from the JSE if the deal goes through. This is in contrast to GPI, which had told its shareholders it had plans to delist from the JSE after disposing of its assets to unlock value for shareholders.
In September, the firm reported that its headline loss for the year ended June 30, 2022 improved by 49%, from a loss of R27 million to a loss of R13.7m. This was due to a recovery in the gaming assets and a reduction in corporate costs, which decreased as a result of the debt reduction.
GPI has been selling assets to put the company on the road to health after the disruption of Covid-19 and unprofitable investments.
Over the past 24 months GPI has disposed of its stake in Burger King South Africa, disposed of smaller investments and properties, closed unprofitable investments, and unbundled its stake in the Spur Corporation to its shareholders.
GPI said that it had constituted an independent board of directors of GPL to evaluate the deal, which has a deadline of April 28, 2023 to meet all conditions and regulatory hurdles.
BUSINESS REPORT