Legacy Hotels & Resorts has moved to end a yearslong shareholder dispute with the Libyan Investment Authority (LIA) after South Africa’s Supreme Court of Appeal ruled that the sovereign wealth fund’s stake in the hotel group must be repurchased at fair value.

The July 21 ruling marks a significant turning point for the hospitality company founded by hotelier Bart Dorrestein, allowing Legacy to remove Ensemble Hotel Holdings, an LIA-linked investment vehicle, as a shareholder.

The decision brings an end to a legal battle that has weighed on the company since 2022.

The dispute placed one of Southern Africa’s most recognised independent hotel groups under pressure as both sides fought over control of the business.

The court decision now provides a path for Legacy to restore certainty around its ownership structure and focus on its hotel operations.

The case involved a complex shareholding arrangement, with Ensemble holding a 39.79% stake in Legacy Hotels & Resorts.

Dorrestein owns 40.84% through Legacy Management Holdings, while Swanvest, a company controlled by Dorrestein, holds the remaining 19.39%.

Court rejects private auction plan in shareholder dispute

The legal battle intensified in 2024 when Ensemble approached the South Gauteng High Court in Johannesburg seeking a private auction that would allow either shareholder group to buy out the other.

Dorrestein criticised the proposal at the time, saying it would force him into a contest against a sovereign wealth fund with significant financial resources.

The Supreme Court of Appeal later found that the earlier ruling supporting the auction process was flawed. Instead, it ordered that Legacy repurchase Ensemble’s shares at a value to be determined by an independent expert.

The court ruling also addresses a dispute over hotel management agreements.

Ensemble had accused Legacy of unlawfully transferring business opportunities to Legacy Hospitality, a company where it held no stake.

Legacy argued that the move was intended to protect the company’s reputation and operations.

Legacy says ruling clears path for future growth

Legacy welcomed the judgment, saying it brings closure to a dispute that had affected the company for several years.

The company rejected claims that the shareholder battle represented a hostile takeover attempt, saying the court decision confirmed that the characterisation was inaccurate.

Dorrestein said the ruling allows Legacy to move forward with greater stability and focus on its employees, hotel owners, guests and long-term plans.

The dispute had also affected the iconic Michelangelo Hotel at Nelson Mandela Square in Sandton, which has remained closed since the Covid-19 lockdown despite being fully furnished.

Legacy Hotels & Resorts operates hotels and resorts across Southern Africa, including properties in Sandton, Cape Town, the Kruger region, the Pilanesberg area and Namibia.

The group was also involved in the development of The Leonardo, a 55-storey mixed-use property in Sandton that became Africa’s tallest residential building.

The repurchase of Ensemble’s shares remains subject to approval under South Africa’s Financial Intelligence Centre Act because of restrictions linked to United Nations sanctions on Libya.

The final value of the shares will be determined by an independent expert based on the company’s value as of Jan. 29, 2021.