Mohsin Tajbhai has resigned as the CEO of Grand Parade Investments (GPI) and will leave in May after overseeing a turnaround in the fortunes of the investment holding company.
Tajbhai took the helm at the group that houses gaming, leisure and hospitality interests in 2019 and will continue to serve as a non-executive director to assist in the transition.
GPI was launched in 1998 as the BEE partner to Sun International. When Tajbhai joined as an independent director in 2018, the group’s share price was R1.80 and trading at a 30% discount to net asset value (NAV).
It is now one of the few holding companies that trades at a premium to NAV, as reported by Business Day last month.
GPI held gambling assets at the time of Tajbhai’s arrival and had made an unsuccessful foray into fast food.
His goals included reducing the shares’ discount to the group’s underlying value, the resumption of dividends, and reducing head-office costs.
He started by closing the Baskin-Robbins and Dunkin-Donuts loss-making franchises in 2019, after the group failed to find a buyer. It bought the US franchises in 2016 and intended to open 250 doughnut stores and 70 ice cream outlets, but these didn’t expand beyond Cape Town.
GPI sold the Burger King franchise to Emerging Capital Partners in 2021 and sold its almost 10% stake in Spur restaurant group in 2022.
The group was hit hard in 2020 by Covid-induced lockdowns that saw casinos closed, but is now “refocusing on cash generative gaming assets” that which have recovered since the pandemic ended.
“I have exceeded goals in terms of unlocking value for shareholders,” Tajbhai told Business Day. “It is the right time for me to leave.”
GPI said in a statement that Tajbhai “has been instrumental in leading the turnaround of GPI through the implementation of GPI’s value unlock strategy, which has culminated in the mandatory offer by GMB”.
Investment banker Greg Bortz’s GMB Liquidity Corporation is the group’s biggest shareholder and made a mandatory offer for the remaining shares in December at R3.33 a share as required by the Companies Act for any investor or company that has a 35% stake or more.
The Competition Commission has approved the offer and GPI will announce the level of acceptances on Tuesday. Bortz, through GMB already owns just under 49% of the group. Sun International holds a 25% stake.
The R3.33 a share offer plus R1.37 paid in dividends in the past 18 months has been a boon for shareholders, Tajbhai said. The value of the shares, including dividends, is up 161% over the past five years.
Most investment holding companies trade at marked discounts to NAV — including JSE stalwart Remgro, where the gap is roughly 45%. GPI’s premium could be explained by its renewed focus on cash-generating gaming assets and a commitment to reduce head-office costs.
GMB has indicated it’s willing to retain GPI’s gaming assets, most notably minority stakes in the GrandWest Casino in Cape Town and Sun Slots — which owns six licensed limited payout machine operators — and to build the portfolio.
Bortz is one of the main shareholders in the Kenilworth Race Course in Cape Town, and one of his partners in that venture is the founder and owner of sports betting business Hollywoodbets, Owen Heffer.
GPI reported increased profit in its most recent interim financial statements, as the hospitality sector continued its recovery from the pandemic, and boosted by a strong performance by the gaming assets controlled and operated by Sun International.
Profit from continuing operations jumped 41.3% year on year to R42.7m and more than doubled to R32.3m at GrandWest.
With Marc Hasenfuss
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