South African hotel and casino operator Sun International revealed today that it has decided to scrap the R6.5-billion plan for the acquisition of rival casino company Peermont Group.
Sun International currently manages a number of hotels and casinos across Africa and Latin America. Last year, the company announced that it was planning to acquire a 100% stake in Maxshell 114, known to be Peermont’s holding company.
Michael Farr, spokesman for Sun International, said on Wednesday that they have informed the South African Competition Tribunal that they have decided to abandon the merger plan and will not take any more steps towards the said merger’s completion. Mr. Farr also referred to the country’s Competition Tribunal as an oversight body that cannot be trusted.
Last year, the South African Competition Commission recommended that the acquisition deal be blocked as if completed, it would eliminate any casino competition in the Gauteng province.
Following the announcement about the deal’s termination, the Competition Tribunal confirmed in a statement from earlier today that the involved parties informed the Tribunal at a preliminary hearing that it was unclear whether a merger would eventually take place and requested for their case to be “removed from the roll.”
At present, Peermont manages a number of hotels and as many as eight gambling venues across South Africa.
The announcement about the merger’s termination comes only a day after it became clear that gambling operator Tsogo Sun would make another attempt to acquire a strategic stake in two Sun International subsidiaries, running casinos in the Western Cape.
It was announced on Tuesday that Tsogo Sun is planning to purchase a 20% stake in SunWest International and Worcester Casino, which operate GrandWest Casino and Golden Valley Casino, respectively. The company is to pay the amount of R1.3 billion for the purpose.
Last summer, Tsogo Sun and Sun International canceled a deal for the acquisition of the same casino properties after a recommendation by the country’s Competition Commission that the deal be prohibited by the Competition Tribunal. Tsogo Sun would have paid the amount of R2.1 billion for the acquisition of a stake in the two Western Cape casinos. Although its latest plan is less ambitious, it is more likely to be materialized.
