Empowerment investment counter Grand Parade Investments (GPI) — which now holds mainly gaming assets — has seen a significant shift in its shareholder register that might point to a new lease on life.
On Tuesday, GPI reported that GMB Liquidity Corporation has snatched a commanding 27.8% stake in the group. This follows unusually high volumes traded in GPI stock last week, a development that spurred the share price from 275c to about 330c.
Not much is known in the market about GMB, save that the company is headed by retired merchant banker and horse racing enthusiast Greg Bortz. Bortz, via GMB, was earlier this year involved in a rescue deal to take over horse racing enterprise Kenilworth Racing in Cape Town.
Initial market reaction to the developments at GPI was that GMB had paid a premium over the market price to take an influential stake in GPI. One asset manager observed: “Clearly the buyer sees significant upside in GPI.”
Bortz told Business Day it was too early to divulge future plans for GPI. “I have taken a meaningful position. These are quality (gaming) assets that fit the value investing thesis.”
Currently, GPI’s main store on value lies in its 30% stake in limited payout machine specialist SunSlots and a 15.1% stake in SunWest, the owner of GrandWest casino in Cape Town. The group also owns a 15.1% stake in the Golden Valley casino in Worcester.
SunSlots, which has recovered rapidly after the Covid-19 shutdowns and GrandWest — historically one of the most profitable casinos in SA — are regarded as two of SA’s best gaming assets.
Gaming giant Sun International is the majority shareholder of both SunSlots and SunWest and has widely been tipped as a buyer for both of these valuable assets. Sun International did take a tilt at grabbing GPI’s 30% stake in SunSlots in 2019, but Covid-19 put that potential deal on the back burner.
Of late, GPI has been in asset realisation mode — having sold off its stakes in Burger King and Spur Corporation. Speculation has suggested the remaining gaming assets will also be sold and the company return the proceeds to shareholders in the form of a special dividend before delisting from the JSE.
But the emergence of GMB suggests that GPI might endure as a gaming-focused investment company, and possibly look at new opportunities. There is already debate around whether GMB would look to reverse its stake in Kenilworth Racing into GPI, which could trigger a search for other opportunities in niche gaming assets.
GPI CEO Mohsin Tajbhai said the board had not yet engaged with GMB.
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