An offer that cannot be refused
The biggest deal in the company’s history seems imminent for Casinos Austria International. A consortium around South Africa’s largest private equity company, Ethos, has entered into negotiations regarding the takeover of Johannesburg Stock Exchange listed Gold Reef Resorts Ltd („GRR“).
The intended takeover price of ZAR 34 per share – including the assumption of existing GRR loans – will result in a transaction volume of over one billion euros. Casinos Austria International („CAI“) holds 21.7% of GRR.
„The proportion of the purchase price to be attributed to Casinos Austria International would amount to around 200 million euros. At an average purchase price of ZAR 3, when bought the shares did not equate to one tenth of the possible sale price. This is an offer one cannot refuse!“, commented Chief Financial Officer Josef Leutgeb from South Africa.
„We are hopeful that the preconditions of the consortium will be satisfied in the coming weeks and a fully financed offer will be made,“ added Leutgeb.
Due to the continuing good performance of the South African casinos, CAI would not suffer in the event of the takeover proposal being withdrawn. „This is a very compelling valuation in current times,“ said finance expert Leutgeb with regard to the question mark hanging over future private equity deals.
CAI has been active in the South African casino market since 1998, with GRR currently operating five casinos across the country: Gold Reef City Casino near Johannesburg, Casino Mykonos in Langebaan, Garden Route Casino in Mossel Bay, Golden Horse Casino in Pietermaritzburg and Goldfields Casino in Welkom. The partners also have two further casinos under development: Casino Queenstown in Eastern Cape Province and Casino Silverstar in Gauteng Province near Johannesburg.
CAI is a leading player in the international casino industry and operates 76 casinos in 19 countries and on board 13 cruise ships. In 2006, CAI and its parent company, Casinos Austria AG, together posted record revenues (wins, registered tips, entrance) of 1.26 billion euros (+ 7.6%), welcomed 19 million guests (+ 2.7 %) and employed around 10,545 staff.