SABMiller to dispose of Tsogo Sun shareholding - CNBC Africa

SABMiller to dispose of Tsogo Sun shareholding

Southern Africa

by admin 0

Alan Clark is the chief executive officer of SABMiller. PHOTO: SABMiller

The beer and soft drinks business expects to dispose of the shares through two conditional transactions, the first being a fully marketed secondary placing of up to approximately 305 million ordinary shares to selected South African and international institutional investors.

The second transaction would involve a buy back by Tsogo Sun of at least approximately 130 million ordinary shares for an aggregate consideration of 2.8 billion rand.

(READ MORE: SABMiller reviews Tsogo Sun stake)

“SABMiller has been a supportive shareholder of Tsogo Sun since 2002 when we transferred our existing gaming and hotel assets into Tsogo Sun as part of a landmark Black Economic Empowerment transaction. The business has performed well over the years,” [DATA SAB:SABMiller] chief executive, Alan Clark said.

“However, gaming and hotels are not core to our operations and we have concluded that the time is right for us to exit our investment through a transaction which is beneficial to shareholders of both SABMiller and Tsogo Sun, and to reinvest the proceeds in our core growth businesses, including our African operations.”

SABMiller currently holds 435 247 904 ordinary shares, representing an effective 39.6 per cent shareholding in Tsogo Sun worth approximately 11.7 billion rand.

(READ MORE: SABMiller sees revenue and margin growth)

Hospitality, leisure, gaming and entertainment group, [DATA TSH:Tsogo Sun] indicated that the transaction is the culmination of a longstanding relationship between SABMiller and Tsogo Sun.

“The board of directors of Tsogo Sun believes that the transaction presents a unique and attractive opportunity to repurchase and cancel a significant number of ordinary shares on terms that are expected to have a positive impact on the company’s earnings per ordinary share and its Black Economic Empowerment shareholding,” the South African company said.

“The board of directors of SABMiller believes that the repurchase will provide SABMiller with certainty over the disposal of approximately 30 per cent of its aggregate shareholding in Tsogo Sun and therefore enhances the prospects of the placing.”

Comments