Avior Capital Markets - Tsogo Sun Gaming Limited (109M) Tsogo Sun | Plan B

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Avior Capital Markets

Tsogo Sun | Plan B

The anticipated unbundling of Tsogo Sun (TSH)'s casino properties to Hospitality Property Fund (HPB) failed to get the required investor support. We believe the purpose for the proposed deal was to increase cash flows to its parent, Hosken Consolidated Investments (HCI). The unbundling would have enabled HCI to invest in bigger deals and in addition, provided HCI with selling and/or unbundling flexibility regarding its three largest investments, namely TSH, HPB and Southern Sun.

TSH surprised market participants by announcing an interim dividend of 132 cents per share (6.9% yield on the day) and Management will review the dividend payout strategy to release more cash to shareholders. Moreover, TSH intends to unbundle its Southern Sun holding (which owns 59.2% of HPB) to investors. We believe will be a win-win compromise for all three companies, following the failed proposed deal.

13/12/2018 12 EN

Underlying

Tsogo Sun Gaming Limited

Tsogo Sun Holdings is a gaming and entertainment company. Through its subsidiaries, Co. is engaged in gaming and entertainment, investment holding, the management of casino interests and group training. Co.'s Operating segments include: Gold Reef City Casino; Gold Reef City Theme Park; Silverstar Casino; Golden Horse Casino; Mykonos Casino; Garden Route Casino; Goldfields Casino; Queens Casino; Gold Reef Management; and Gold Reef Resorts.

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ZAE000156238 South Africa

Provider

Avior Capital Markets

Avior is a globally recognised capital markets research and trading firm, with the broadest research coverage within the region, with 100+ SA and 20+ SSA companies under coverage. Avior services clients from offices in London, Cape Town and Johannesburg.

Our research quality is consistently recognised in local and global surveys, with 18 analysts currently rated in their respective sectors (FM 2017). Value add through in-depth, innovative, high quality and consistent research with comprehensive underlying fundamental modelling supported by regular analyst and roadshow interactions.

Avior has proven that by working closely with our clients we can mutually develop dominant positions in certain sectors, going from strength to strength. Avior has a dedicated ESG team, having been ranked #1 in Corporate Governance research since 2008.

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Tsogo Sun | Plan B

SUI | Sun International |TSH | Tsogo Sun Holdings | SA Travel and Leisure: Casinos - Laying the odds for 2018

A director bought 1,806,061 shares at 20.770ZAR and

Tiger Brands | ESG | Pressed to execute

SA Investment Strategy | Review of January 2020 for SA investors: Coronavirus weighs on the ZAR

SA Banks | Low credit risk in commercial property | Time to buy SA banks

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