Southern Sun and Pareto move to acquire Liberty's shares of Sandton properties
JSE-listed hospitality and leisure group Southern Sun has proposed nonbinding terms to acquire 50% of the shares of the Sandton Towers, Garden Court Sandton City, Sandton Convention Centre and the Virgin Active Sandton properties from JSE-listed financial services and investment management firm Liberty Group.
Southern Sun currently operates the Sandton Sun, Sandton Towers, Garden Court Sandton City and the Sandton Convention Centre properties under long-term lease and management contracts for Liberty.
Liberty owns 75% of the shares of the properties, while property investment management company Pareto, which is owned by the Government Employees Pension Fund, owns 25% of the shares of the properties.
Pareto will increase its share of the properties to 50% and Southern Sun will acquire the remaining 50%, if the proposed transaction is completed, Southern Sun says.
The aggregate value of Liberty's 75% interest in the target assets is R1.1-billion and Southern Sun's 50% share equates to R735-million, which is payable in cash from available debt facilities.
The aggregate valuation of the target assets as at December 31, 2024, which is the last available independent valuation, was R1.44-billion, with Liberty's 75% interest equating to R1.08-billion.
The audited profit of the target assets for the year ended December 31, 2024, was R153-million.
However, the Sandton Sun hotel will continue to be owned by Liberty and Pareto, and Southern Sun will continue to operate the hotel under a long-term lease agreement.
Meanwhile, Southern Sun owns, either through freehold or leasehold title, 85% of its total hotel portfolio.
The proposed transaction aligns with Southern Sun's strategy to strengthen its portfolio of high-quality, strategically located assets in key metropolitan nodes, and presents an opportunity to increase its freehold exposure to world-class hospitality assets alongside long-standing partners.
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