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Gold Reef investors fume over takeover bid

21 January 2008

SOUTH AFRICA -- As reported by the Johannesburg City Press: "Black investors in casino group Gold Reef are livid that rival operator Tsogo Sun has sought to thwart a takeover bid by a private equity led consortium for R11.4 billion.

"Tsogo Sun's intention to acquire Gold Reef has been on the cards for about two years.

"With the consortium offer, the empowerment shareholders, who would have had their 25% equity valued at R2.3 billion for the purpose of the transaction, were looking forward to an easy and hurdle-free way to cash in and still stay invested in the Gold Reef business.

"Among those who would have been in line to rake it in are heavyweights Reuel Khoza, Mzolisi Diliza, Dudu Kunene and Richard Moloko and their empowerment vehicles, which collectively hold 80% of the BEE stake.

"...Moloko, who represents the ­entire black interest in Gold Reef, says their support for the deal had been unanimous.

"...He suggests that selling to Tsogo would have attracted a significant risk of disapproval by the competition authorities owing to market concentration.

"Not so, contends Tsogo Sun, which has filed a submission with the Gauteng Gambling Board (GGB) objecting to the proposed sale of Gold Reef to the consortium led by Ethos Private Equity, Goldman Sachs (Bidco) and the casino group's senior management..."

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