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Ethos, Goldman consortium casino bid may be delayed

An Ethos Private Equity and Goldman Sachs consortium has run into regulatory difficulties in its acquisition of casino group Gold Reefs after securing funding in problematic credit markets in September.

Ethos Private Equity and Goldman Sachs’ R11.4 billion ($1.5 billion; €1.1 billion) offer for Gold Reef Resorts may need to be extended following a complaint by a rival bidder, according to someone close to the bid.

The bid has been delayed by a formal complaint lodged by the gambling group Tsogo Sun with the country’s gambling regulator citing irregularities in the bid process. The consortium may need to seek an extension of its January 31 transaction deadline should the legal difficulties prolong the bid beyond this date.

The consortium will have to pay an additional R0.01 per share for each day the deal is prolonged beyond January 1 adding around R3 million to the bid price as of today. The initial bid price was at R34 per share.

The deal was one of the first deals greater than $1 billion (€681 million) financed after the problems in the worldwide credit markets became apparent in August, as the consortium launched its fully financed bid in September.

Separately Ethos has today bought a $130 million stake today in Nigerian bank Oceanic Bank International alongside Old Mutual Investment Group after a lengthy bid process. The firms ran into regulatory difficulties last year, according to a source close to the bid.