LONDON (Reuters) - SABMiller will dispose of its $1 billion (583 million pounds) stake in South African-listed gaming, hotel and entertainment group Tsogo Sun, the global brewer said on Monday.
SABMiller has a 39.6 percent shareholding in Tsogo Sun valued at approximately $1.09 billion. The stake dates back to 2002, when SABMiller transferred its existing gaming and hotel assets into Tsogo Sun.
The maker of Peroni and Miller Lite beers has been reviewing its "non-core" Tsogo Sun holding as it concentrates on building its beer business in emerging markets, such as Africa, Asia and Latin America.
"Gaming and hotels are not core to our operations and we have concluded that the time is right for us to exit our investment through a transaction which is beneficial to shareholders of both SABMiller and Tsogo Sun," said SABMiller Chief Executive Alan Clark.
He said the firm would reinvest the proceeds, including in its African operations.
SABMiller said it would dispose of up to all of its holding through a placing of up to 305 million shares to South African and international institutional investors, and a buyback by Tsogo Sun of at least 130 million shares for about $260 million.
Shares of Tsogo Sun, which operates over 90 hotels in Africa, the Middle East and the Seychelles as well as casinos, theatres, cinemas, restaurants and conference facilities, were down 3.8 percent at 0927 GMT in Johannesburg. Shares of its largest shareholder, Hosken Consolidated Investments Ltd, were down 0.5 percent.
The company took its present form from the 2011 merger of Tsogo Sun with casino and theme park operator Gold Reef, a deal that saw SABMiller's stake shrink from 49 percent.
Tsogo Sun's management will begin a roadshow on Monday to meet selected institutional investors in South Africa and beyond regarding the placement of shares. The exact number of shares to be placed, and the price, will be determined following a bookbuilding process to take place next week.
Shares are expected to trade on July 21, with a settlement date of July 28.
(Reporting by James Davey and Martinne Geller; editing by Jason Neely and Louise Heavens)