The privately owned South African management company Allan Gray has been confirmed as the buyer of Casinos Austria International’s 20.6% stake in Gold Reef Resorts. Allan Gray was previously a shareholder but at a virtually insignificant amount to clients, given the size of other assets. The purchase represents 60.2 million shares at R16 per share and an investment of nearly R1 billion (US$125 million), a sharp reduction on the R34 per share offered last year by Ethos in a failed buyout.

Earlier this month Gold Reef Resorts won its High Court challenge to set aside a Securities Regulation Panel (SRP) ruling of improper behaviour by the company in accepting a now failed R9.83 billion buyout offer from private equity group Ethos in 2007. In January last year rival casino group Tsogo Sun, whose bid for Gold Reef was spurned by management in August 2007, took its complaint to the SRP, alleging Chairman Maxim Krok was given R12 million to persuade Gold Reef’s management to agree to a lower offer Ethos made for the company.

In February last year, the Ethos bid collapsed when the SRP said that had it been aware of Tsogo’s allegations, it would not have given the Ethos transaction its blessing. The High Court judge criticised Gold Reef’s management but said the court was unable to apportion responsibility. The judge’s ruling stated: “Had the SRP appreciated the argument of (Gold Reef), it would have found that there was no offer by Tsogo as defined in the code, and there was therefore no merit in its complaint.”

In announcing the successful closure of the sale, Casinos Austria’s Director General Dr Karl Stoss, who is Chairman of CAI, yesterday said he was delighted. "As shareholders and management partners, we can be proud of Gold Reef's economic development and of the value it has created for investors." The sale reflects Casino Austria’s present strategy of focusing on holdings in which the company holds significant management control. The company was able to take advantage of the Rand’s current relative strength. (E-05.29.09)

© Copyright 2009 CasinoCompendium



>>> return to archives
>>> return to frontpage