Sun International announced Tuesday that they are seeking a R675 million settlement with Peermont after their bid to merge the two companies under Sun was blocked by South Africa’s Competition Commission in December. The settlement would reportedly assist Sun International in going forward with casino plans at the integrated resort in Tshwane on Menlyn Maine, dubbed Times Square.
Last year Peermont objected to Sun moving their Morula casino licence from Mabopane to Tshwane and when Sun International announced an agreement had been made to purchase Peermont for R9.43 billion, it appeared as if the last major hurdle to their plan had been eliminated. However the anti-monopoly and service saturation watchdog found otherwise.
The seemingly unstoppable loss to Sun is much larger than the premiere location on Menlyn Maine, which this settlement seeks to hold on to. Peermont’s portfolio contains hotels and casinos in South Africa and Botswana including 9 casino resorts, a stand alone casino, and three freehold hotels. The company’s premiere property is Emperor’s Palace Hotel Casino Resort at Kempton Park, Johannesburg with 188,000 square feet of gambling space and four separate hotels.
Sun International plans to pay Peermont R675m to go forward with the Times Square casino at Menlyn Maine. The casino is expected to open in 2017.
Sun International’s interim results for H2 2015 showed diluted earnings falling by 19 percent with revenues increasing 10% and SA casino revenue only growing 0.6 percent. Investments in South America helped offset losses at home. Reuters reports that the company is taking another look at its R536 million ($USD34.8 million) investment in Nigeria as some employees have been detained there and the government is investigating one of its investments.
Sun International (JSE: SUI) closed Friday at 6,950.00 ZAC up 200.00 (2.96%) for the day after a low Thursday of 6646.