Tsogo Sun Hotels intends to pick up an additional 7.98% stake in subsidiary Hospitality Property Fund through a share swap, citing its current significant discount to net asset value per share.
Tsogo intends to acquire about 46.1-million Hospitality shares from various fund managers, worth about R124m on Monday morning, by exchanging shares at a rate of 1.77 Tsogo Sun Shares for every Hospitality share. As of the end of March, Hospitality had a portfolio of R10bn and a net asset value per share of R13.27, trading at about a 77% discount as of Monday morning.
“Hospitality has consistently traded at a substantial discount to its net asset value,” Tsogo said. “Furthermore, the nature of the business of Tsogo Sun Hotels and Hospitality are substantially similar and have in principle the same economic drivers,” the statement read.In morning trade on Monday, Tsogo’s share was unchanged at R2.10, having fallen about 46% so far in 2020.