Ethos-led consortium to acquire Gold Reef for R11.4bn
3 September 2007

Johannesburg (3 September 2007) – An Ethos Private Equity-led consortium today expressed its firm intention to acquire the entire issued and to be issued share capital of leading South African gaming and entertainment company, Gold Reef Resorts Limited.  The offer of R34 per share represents an estimated enterprise value of R11.4bn and would be one of the largest private equity-led transactions in South Africa to date.  The offer is at a 48.5% premium to the pre-cautionary price of R22.90, as at 8th March 2007.

The consortium comprises Ethos Private Equity, investment subsidiaries of Goldman Sachs and real estate investment funds sponsored and managed by Goldman Sachs, certain broad-based Black Economic Empowerment groups which currently own an interest in Gold Reef, and members of the Gold Reef management team.

The buyout is backed by fully committed financing provided by a cluster of banks, including Goldman Sachs and Nedbank Corporate, a division of Nedbank Limited.  The offer is still subject to certain conditions precedent, which include approval from the relevant Provincial Gambling Boards and Competition Commission.

Ethos Partner Garry Boyd comments, “We consider this a unique opportunity to acquire a leading South African casino operator.  Furthermore, the consortium looks forward to partnering with the Gold Reef management team who have an excellent track record of delivery, together with strong cash flow and revenue generation.”

Steven Joffe, CEO Gold Reef Resorts, commented on the offer, "Management supports the Ethos offer which enables all shareholders to realise significant value for their investment.  We eagerly anticipate a successful partnership into the future”.

“Unique to this transaction is the construction of the acquiring consortium, which draws together significant domestic, foreign and Black Economic Empowerment (BEE) equity parties.  Particularly pleasing is the facilitation of greater BEE shareholding in Gold Reef,” adds Ethos Partner, Anthonie de Beer. 

Richard Moloko of the BEE grouping remarks, “The BEE group has acquired 30% of the new company which represents a significant increase of 4.9% when compared with the present GRR shareholding. We are looking forward to establishing a fruitful partnership with our new partners Ethos Private Equity and Goldman Sachs.”

Colin Coleman, Managing Director of Goldman Sachs International, reflects "Goldman Sachs is pleased to be making a significant equity investment in Gold Reef, and thereby in South Africa. The significance of this transaction and the magnitude of Goldman Sachs’ investment underscores our confidence in the future of this country and this company. "

Approximately 80,5% of the existing shareholders of the company have irrevocably undertaken to the Consortium to accept the offer in respect of their entire shareholdings, subject to no competing offer being received which is at least 10% higher than R34,00 a share. 

Gold Reef operates the Gold Reef City Casino and Theme park in Johannesburg and is developing the Silverstar Casino on the West Rand, both in Gauteng Province.  It also operates the Golden Horse Casino in Pietermaritzburg, the Garden Route Casino, the Mykonos Casino at Langebaan, the Goldfields Casino, and has a shareholding in the Queenstown Casino which is currently under development.

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