The Competition Tribunal on Wednesday approved the hostile takeover of hotel and casino company Johnnic by Mercanto, a 100 percent-owned subsidiary of Hosken Consolidated Investments (HCI).

The approval was subject to the condition that the merged entity divest its Gallagher Estate Exhibition and Convention Centre within 12 months from the date of the order, or within an extended period to be granted by the Tribunal, to a willing and able independent third party.

The tribunal said the reasons for the decision would be released later.

On Monday HCI secured 6.7 percent of Johnnic in a hostile bid, raising its ownership to 46.5 percent.

Johnnic had urged shareholders to reject the HCI bid. The bid consists of R10.70 per Johnnic share or one HCI share for every 2.57 Johnnic shares, for the 60 percent of Johnnic it did not already own.

HCI has valued Johnnic at about R1.8-billion. Johnnic says the offer is too low.

Johnnic shares plunged nine percent before the ruling, recovering to end 6.1 percent lower at R11.50 at the end of trade on Wednesday. HCI ended unchanged at R35.

Sapa

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