Sun International has agreed to pay $42.8 million to fellow South African hotel and casino operator Peermont Group after the planned $623 million takeover of its rival firm failed to materialize amid competition concerns.
Johannesburg-based Sun International owns the giant Sun City Casino Resort in South Africa alongside 25 other properties across Africa and The Americas. The firm had earlier agreed to pay Peermont Group as much as $57.5 million if the envisioned takeover failed and its new Time Square Casino at Menlyn Maine began operations.
This new development near Pretoria will contain a casino and is now in its final stages of construction with an expected opening date in April of 2017. Peermont Group had previously objected to the project in the High Court before reaching a deal to combine the companies.
Sun International agreed the deal to buy Peermont Group, which is owned by a private equity group led by the Mineworkers Investment Company and operates 16 hotels across South Africa, Botswana and Malawi, in March of 2015 and had hoped to add prestigious properties including Johannesburg’s Emperors Palace Hotel Casino Resort to its portfolio while additionally resolving the dispute over its Menlyn Maine development.
However, December saw the nation’s Competition Commission rule against the deal due to the effects it may have on the gambling market in Gauteng. Although the Competition Tribunal was due to conduct a hearing into the takeover in June, this would have been three months after a March 31 approval deadline the companies had earlier set.