Pareto secures 100% of Sandton Convention Centre and prime hotels in R1.1bn deal

The landmark Sandton Convention Centre in Sandton Central Johannesburg, which is now wholly owned by Pareto, together with two adjacent hotels. Picture: Sandton Convetion Centre website Pareto Limited – the unlisted property giant effectively owned by the Government Employee’s Pension Fund (GEPF) – has secured full control of the landmark Sandton Convention Centre (SCC) and neighbouring Sandton Towers and Garden Court Sandton City hotels in a plum R1.1 billion deal with Liberty Group. The deal has already secured Competition Commission approval Pareto CEO Malose Kekana told Moneyweb on Wednesday.

However, the transaction no longer includes JSE-listed Southern Sun, which operates the SCC and hotels for Standard Bank Group subsidiary Liberty and Pareto. Pareto previously owned 25% of the properties with Liberty Two Degrees, and announced on 3 February that it would buy the balance for around R1.1 billion together with Southern Sun. However, that deal included Southern Sun taking 50% for around R735 million and Pareto a further 25% for the balance of the deal amount.

This would have meant Pareto and Southern Sun would have each owned a 50% stake Southern Sun said this week in a short JSE filing that it is no longer part of the deal, after existing shareholder in the properties Pareto decided to exercise its pre-emptive rights. In the Sens update titled ‘Termination of the Proposed Transaction to Acquire a 50% Undivided Share in Certain Sandton Consortium Properties’ – Southern Sun said: “Shareholders are advised that Pareto Limited has elected to exercise its pre-emptive right and therefore, Southern Sun will no longer acquire an undivided share in certain Sandton Consortium Properties… from Liberty Group Limited.” It said the parties have “terminated negotiations”. “Nothing has changed in terms of deal value as previously announced,” Kekana told Moneyweb, adding that the new deal effectively means Pareto has secure 100% ownership of the properties. As indicated, Pareto Limited has opted to exercised the pre-emptive right in terms of the sale by Liberty Group Limited of Sandton Towers, Sandton Convention Centre, and Sandton Garden Court,” it said.