Tsogo Sun calls off R23 billion deal with Hospitality Property Fund
The deal didn't receive shareholder support.
Hotel and gaming group, Tsogo Sun, has called off its plans to sell its seven casino and hotel properties to real estate group Hospitality Property Fund due to the lack of support from shareholders.
The deal was worth R23 billion.
“The sale of shares and subscription agreement has been terminated by agreement between Tsogo, Hospitality and the remaining parties to that agreement,” Tsogo said in a statement.
Tsogo Sun’s long-stated mission was to spin off all of its hotel and casino properties into Hospitality Property Fund, a separately JSE-listed company.
But the canned deal with Hospitality Property Fund means that Tsogo Sun’s ambition is delayed.
Tsogo Sun said it decided to terminate the deal following engagements with “certain Tsogo Sun investors.” “The transaction and the unbundling did not enjoy support of sufficient Tsogo shareholders for their implementation,” the company said.
Under the deal, Tsogo was set to shift 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 percent of Hospitality after the transaction but was expected to unbundle those shares to investors.