SABMiller to sell Tsogo Sun shareholding
South African brewer SABMiller on Monday announced that it would dispose of its 39.6% shareholding in JSE-listed gaming, hotel and entertainment group Tsogo Sun Holdings, as this was not core to the group’s operations.
The brewer indicated that its stake in Tsogo Sun was valued at about R11.7-billion, based on the closing share price of R26.90 on July 4.
“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,” commented SABMiller CEO Alan Clark.
SABMiller would dispose of its shareholding through two conditional transactions – a fully marketed secondary placing of up to about 305-million ordinary shares to selected South African and international institutional investors, and a buy-back by Tsogo Sun of at least 130-million ordinary shares for an aggregate consideration of R2.8-billion.
“The board of directors of Tsogo Sun believes that the repurchase represents a unique and attractive opportunity for [the company] 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,” Tsogo Sun said.
Tsogo Sun would use a combination of existing cash reserves and debt facilities to pay for the shares.
The share buy-back was expected to be finalised by September 1.
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