Real Africa Holdings (RAH) has advised its shareholders not to accept a 590 cent per share offer by South Africa’s Sun International. The unsolicited offer was considered by an independent sub-committee of the RAH Board and external finance advisors to be “neither fair nor reasonable.” The external advisor estimates a minimum value should be 640 cents per share. RAH maintains that its shareholders would be denied participation in future gaming growth prospects if the Sun International bid succeeds.

Afrisun Leisure Investments, a 66.3% held subsidiary of RAH, has investments in GrandWest Casino, Carnival City Casino, Sibaya Casino and Boardwalk Casino, as well as in National Management Company and Gauteng Resort Manco. RAH has been divesting its non-gaming assets to position itself as a listed investment holding company with high growth gaming assets, and its stated aim is to acquire more gaming assets. There is an ongoing legal dispute between Afrisun and Sun International over the 2003 sale of shares in SunWest International. Afrisun, as a SunWest shareholder, is claiming a breach of a shareholder agreement and wants damages of R327 million (US$48.5 million).

Sun International is understood to have been given irrevocable undertakings by two fund managers, Allan Gray and Coronation Capital, to accept its offer, accounting for 50.9% of RAH shares. Sun International presently holds an additional 1.6%. RAH has, since 2003, returned R1.241 billion to shareholders (US$179 million) through its policy of disposing of non-gaming assets and is in the process of selling its interests in Oceana and Life Esidimeni. (E-06.19.06)

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