The stake, acquired by HSS Investments and Entertainment Holdings, two subsidiaries of Tsogo Sun Gaming, could herald the casino operator's return to the hotel business, reversing its split into two separate entities - casinos and hotels - in 2019.

According to Refinitiv and company's shareholding data, HSS Investments and Entertainment Holdings between them owned up to 5% in City Lodge as of mid-May.

The two unlisted entities are not known publicly to be Tsogo Sun Gaming subsidiaries, but information from the companies' register showed they share an address and have some of the same directors as Tsogo Sun.

An analyst at an asset management firm confirmed the link between the two unlisted entities and Tsogo Sun Gaming.

The analyst, who wished to stay anonymous due to his firm's investments in these companies, said share ownership data showed Tsogo Sun, through two entities, had bought shares in City Lodge since January.

Neither Tsogo Sun Gaming nor City Lodge responded to requests for comment.

But on May 15, City Lodge issued a statement that HSS Investments' "beneficial interest in the securities of the Company (City Lodge) now amounts to 5.0%."

City Lodge did not mention Entertainment Holdings or a link to Tsogo Sun.

On Tuesday, City Lodge traded at 4.60 rand ($0.2484) per share, roughly half its value before the pandemic. That represents a discount to the replacement value of its assets, or the value it can get if it sells off its properties, which it said in February was around 10.60 rand a share.

($1 = 18.3161 rand)

(Reporting by Promit Mukherjee; editing by Barbara Lewis)

By Promit Mukherjee