Tsogo Sun's Hospitality deal is off, shares drop nearly 4%

Hospitality and gaming group Tsogo Sun [JSE:TSH] will not be disposing of seven mixed-use casino properties to the separately listed Hospitality Property Fund, nor unbundling its entire holding of Hospitality shares to shareholders, it announced on Monday.

It had become clear at the reconvened general meeting held on Monday morning that not enough shareholders supported the proposed transaction and unbundling, Tsogo said in a statement.

"Accordingly, the Tsogo board of directors had withdrawn the resolutions that were to have been considered at the reconvened General Meeting and the Sale of Shares and Subscription Agreement was terminated by agreement between Tsogo, Hospitality and the remaining parties to that agreement.

"As such, no resolutions were proposed for consideration at the reconvened General Meeting and the meeting terminated," the statement read.

Tsogo was set to shift over R20bn of mixed-use casino properties to its subsidiary, Hospitality Property Fund, with the aim to split along the functions of hotels, property and gaming. Tsogo was set to hold 87% of Hospitality after the transaction, but was expected to unbundle those shares to investors.

Earlier this year, Fin24 reported that Tsogo was slowing investments in expanding existing businesses and making new acquisitions after debt ballooned.

CEO Jacques Booysen told Fin24 of plans to expand further into Africa.

As of 13:50 on Monday, Tsogo's shares had fallen 3.90% to R20.47 per share.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
16.81
(+0.09)
ZAR/GBP
21.33
(-0.19)
ZAR/EUR
19.01
(+0.67)
ZAR/AUD
11.73
(-0.15)
ZAR/JPY
0.15
(+0.64)
Gold
1683.93
(-1.60)
Silver
17.39
(-1.29)
Platinum
816.00
(-2.44)
Brent Crude
39.83
(+0.50)
Palladium
1944.00
(+1.29)
All Share
54722.38
(+2.85)
Top 40
50199.80
(+2.79)
Financial 15
11467.53
(+4.66)
Industrial 25
74264.52
(+2.52)
Resource 10
49969.31
(+2.29)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
19% - 194 votes
I am taking a hit, but should be able to recover in the next year
26% - 268 votes
My finances have been devastated
29% - 294 votes
It's still too early to know what the full effect will be
26% - 260 votes
Vote