NEW YORK (The Deal) -- The U.K.'s SABMiller, brewer of Miller Genuine Draft and Pilsner Urquell, said Tuesday it is reviewing options for its $1 billion stake in South African hotel and casino operator Tsogo Sun Holdings Ltd.
The move comes about four years after SABMiller merged Tsogo Sun--an asset it has held for three decades--with Gold Reef Resorts, reducing its own stake from 49% to 39.6%. SABMiller, partially owned by Altria Group (MO - Get Report), said that stake is worth 10.9 billion rand ($1.042 billion).
"This investment is not considered to be core to the beverage operations of SABMiller, and therefore SABMiller is reviewing its strategic options for the shareholding," it said, including the standard disclaimer that a transaction will not necessarily result from the review.
A spokesman for SABMiller declined to disclose advisers. He added that no broader strategy was in place to shed assets, and that Tsogo Sun was a rare legacy holding.SABMiller shares fell 1.3% in London on Tuesday to 3,083 pence. Tsogo Sun Holdings added 0.9%, to R2,563 in Johannesburg. Johannesburg-based Tsogo Sun is South Africa's leading gaming, hotel and entertainment group. Its largest shareholder is Hosken Consolidated Investments, with a 41.3% stake, according to the company's website. Its leisure empire encompasses more than 14,500 hotel rooms in South Africa, Africa, the Seychelles and the Middle East, as well as 250 conferencing and banquet facilities, including the Sandton Convention Centre in Johannesburg. SABMiller's heritage dates back to South Africa in 1895, when the drink of choice among miners and prospectors was raw potato spirit mixed with tobacco juice and pepper. The then-South African Breweries listed in Johannesburg in 1897 and in London the year later. In 1999, SABMiller formed a new U.K.-based holding company and moved its main listing to London. Separately on Tuesday, SABMiller reported that revenue increased by 3% in the 12 months through March 31 and 2% in the fourth quarter, as growth in Latin America outpaced declining volumes in Europe and North America. "We continued to deliver top-line growth of the year, despite a number of headwinds and a challenging fourth quarter," CEO Alan Clark said in a statement.