Sun International moves to buy Emperors Palace in massive acquisition
Sun International announced that it has entered into an agreement with the shareholders of Peermont Holdings Proprietary Limited to acquire all of the issued ordinary shares and any claims on loan account against Peermont Group.
Peermont is the hospitality and entertainment group that owns and operates the flagship Emperors Palace Resort in Johannesburg.
According to Sun International – the brand behind the iconic Sun City resort – the acquisition represents a significant value proposition and will give the group a chance to acquire significant gaming and hospitality assets
The exact purchase consideration payable in cash to the sellers is still to be determined.
However, the group noted that Peermont carries an enterprise value of R7.3 billion, and the final offer will be less net debt and certain sellers’ transaction costs and subject to capital expenditure and working capital adjustments.
If applicable, calculated at the closing date of the proposed transaction, these are estimated to amount to approximately R3.236 billion as at 30 September 2023.
Implementation of the agreement is subject to the fulfilment of conditions precedent standard for a transaction of this nature, including approval by the relevant Competition Authorities, the Gauteng Gambling Board and Sun International shareholders.
Sun International said that the acquisition of Peermont will bring with it one of the largest, most cash-generative, high-quality casinos situated in a major metropolitan area.
“With its unique proximity to the OR Tambo International Airport, Emperors Palace offers a gateway to high net-worth customers from the rest of Africa and abroad. This customer base will drive opportunities for synergies with the rest of the Group’s operations, including hotels and resorts, as well as the online sports and gaming business, creating large-scale benefits for Sun International,” it said.
“The proposed acquisition will further enhance the group’s online business platform with opportunities for growth by extending Sun International’s proven SunBet management team’s reach across the Peermont Group’s assets.”
The group said that the addition of Peermont’s land-based casinos to our portfolio, underpinned by the flagship Emperors Palace Resort, will boost earnings and cash flow generation.
Sun International Chairman Sam Sithole said: “Sun International has already received written indications of support from shareholders holding approximately 63% of the issued shares of the group, underlining the confidence that our shareholders have in the management team as well as their support for the proposed transaction.
“Echoing this sentiment, the Board believes that the combined group provides a compelling equity story, through increased scale, a larger enterprise value and greater capital markets visibility and is confident that the management team will deliver on the strategy.“
Read: Warning over R25 Sun City scam doing the rounds in South Africa
Loading ...