A subsidiary of the sovereign wealth fund, Ensemble Hotel Holdings, has approached the Gauteng High Court (Johannesburg) seeking an order that a private auction be held in which it will bid to buy out Dorrestein and his associates’ shares in the firm. According to Ensemble, the auction will be a two-way street, where Dorrestein and other shareholders will be given a chance to outbid them for control of the property portfolio that stretches from Sandton to Namibia. Business Day, a South African newspaper, reports that this approach has caused concerns for Dorrestein as ‘it will be suicidal’ to go on such an auction against a sovereign wealth fund.
Ensemble owns 39.79% of Legacy Hotels, which owns five star establishments such as Michelangelo Hotel, the Michelangelo Towers, the Raphael, the DaVinci Penthouse Suites and The Leonardo. Dorrestein’s investment vehicle Legacy Management Holdings (LMH) owns 40.84% and an entity called Swanvest has a 19.39% stake in the group. Swanvest is also controlled by Dorrestein.
Ensemble said its application was motivated by an ‘irretrievable’ breakdown of relations between it, LMH and Swanvest. Dorrestein is opposing the application, stating he does not agree with the manner Ensemble plans to sever ties that go back more than two decades. To defend their interest, LMH and Swanvest have launched a counter-application, asking the court to allow it to repurchase the shares held by Ensemble in Legacy Hotels. Both matters are still to be heard in court, with the parties not willing to disclose more details of dispute and origination.