There could be some exciting times ahead for horseracing after the news broke on Wednesday that Kenilworth Racing Chairman Greg Bortz now owns 53.65% of Grand Parade Investments (GPI), which was started as an empowerment gaming company and BEE partner to Sun International.
The energetic Bortz has been a massive playmaker in the pressured local horseracing industry and has turned the Cape racing ship around in just over six months since bringing in a new team and refreshing concepts and ideas.
Horseracing in South Africa’s thoroughbred breeding rich Western Cape province is seen as the crown jewel of the sport in the country, and Bortz has some exciting plans.
The businessman told the Sporting Post that beyond the obviously attractive investment potential, the acquisition of the majority share in GPI made good sense, purely on the face of it.
“Grand Parade is a part owner of the two best gaming assets in South Africa (GrandWest Casino and Grand Slots). Grand Parade’s exposure to these assets was “obscured” by its food investments. Now that Grand Parade has returned to its roots as a pure play gaming business, I am expecting strong cash flow and profitability going forward. We intend to continually explore how best to utilize this cash flow to maximise shareholder returns. And of course, this includes investigating any mutually synergistic opportunities that may exist between Grand Parade and horseracing in the Cape. For now, we are keeping an open mind and moving as fast as we can,” he added.
As reported on www.businesslive.co.za, Bortz said the company is now a ‘pure play gaming asset’ — which owns 30% of Sun Slots — a firm with limited payout gaming machines, a 15.1% interest in gaming and leisure group SunWest, which owns GrandWest Casino, a 15.1% interest in Golden Valley Casino in Worcester and the Table Bay Hotel, amongst other commercial properties.
Greg Bortz – big plans! (Pic – Troy Finch)
Bortz owns the stake through one of his family investment vehicles, GMB Liquidity Corporation (Pty) Ltd.
Once a shareholder owns 35% or more of a firm it must make a mandatory offer to buy the entire company in terms of the Companies Act. Upon reaching that milestone, Bortz extended the mandatory offer to all shareholders, at R3.33. The transaction closed on April 6th, with Bortz winding up with 53.65%.
Bortz, who grew up in Durban, and who made his money in private equity in the US, began snapping up shares in GPI last year and when his stake exceeded the threshold in November, he made the offer. Bortz was given the go-ahead by the Competition Commission for the buyout in the middle of March.
Independent expert KPMG Services found that the offer price of R3.33 a share offer was fair to shareholders.
Sun International owns about 25% of GPI and has previously expressed interest in buying out its 30% stake in Sun Slots.
GPI’s shares are now trading at a 27% premium to net asset value.
Bortz said with a free float of about 22% — referring to shares traded on the open market — he has no intention of delisting the firm.
