Acquisition Of 100% Of Carentan Investments (Proprietary) Limited (“Carentan”)

1.   Introduction

1.1  Shareholders are hereby advised that GPI, through its 100% held subsidiary GPI Slots (Pty) Ltd, has entered into an agreement, dated 2 November 2009  to purchase 100% of the issued share capital of Carentan plus shareholders loan accounts from Tatts Group Limited (“Tatts”), an international gaming company listed on the Australian Stock Exchange (“the acquisition”).

 

1.2  Carentan is the majority shareholder of Thuo Gaming South Africa (Pty) Ltd (“Thuo SA”), holding company with interests in operating entities that hold gaming licenses in the limited payout machine (“LPM”) industry throughout South Africa.

 

1.3  The acquisition referred to in 1.1 above constitutes a category 2 transaction in terms of the Listings Requirements (“LR”) of the JSE Limited (“JSE”).  This announcement is for information purposes only and no action is required by GPI shareholders with regards to the acquisition.

 

2.   Details of the business of Carentan

Carentan was originally established as an investor in operators of LPM’s  throughout South Africa.  Carentan established Thuo SA to hold its interests in companies that submitted bids for gaming licenses in various provinces, and to house certain centralised services for the bid companies.

When a provincial bid was successful, the bid companies commenced business by installing, operating and servicing LPM’s at gaming sites.Successful license applications led to the formation of two operating companies, Thuo Gaming Western Cape (Pty) Ltd (“Thuo WC”) and Thuo Gaming

Kwazulu-Natal (Pty) Ltd (“Thuo KZN”).  The gambling licenses are held within these entities and Thuo WC and Thuo KZN were both given permission to operate 1000 LPM’s in their respective provinces. Other bid companies were established and in certain instances were successful in obtaining gambling licenses. To date Thuo WC and Thuo KZN are the only operating subsidiaries of Thuo SA. GPI already has an interest in the two provincial operating companies, through its subsidiaries, GPI Slots (25.1% effective stake in Thuo WC) and Akhona GPI (22.5% effective stake in Thuo KZN).

 

3.   Rationale for the acquisition

It has long been the intention of GPI to grow shareholder wealth by taking control of an operating business.  As an already significant minority shareholder in the two operating companies (Thuo WC and Thuo KZN), GPI identified these companies as attractive targets to control. GPI believes that this acquisition provides a tremendous opportunity to leverage the gaming industry expertise that exists within its senior management team.

Thuo WC (trading as Grandslots) is already a strongly cash generative business and GPI is confident that Thuo KZN (trading as Kingdomslots) will follow suite once its site roll out program reaches critical mass.  The two businesses have developed strong market positions that can be further improved through synergies within the GPI group.

In taking control of these businesses, GPI remains true to its stated strategy of investing in quality, cash-generative gaming assets from which significant value can be derived.

 

4.   Particulars of the acquisition

 

4.1  Subject matter of the acquisition

The subject matter of the acquisition is 100% of the issued share capital in Carentan plus shareholders loan accounts against that company held by the vendor referred to below.

 

4.2  The vendors

The vendor is Wintech Investments (Proprietary) Limited, a company incorporated in Australia and a 100% subsidiary of the Tatts Group.

 

4.3  The effective date

The effective date of the acquisition is 1 July 2009.