- April 5, 2016
- Posted by: admin
- Category: Tsogo Sun Holdings
South African gambling operators Tsogo Sun and Sun International have revived plans for Western Cape casino ownership reshuffle. Tsogo Sun has revealed that it would buy a 20% stake in two Sun International subsidiaries that operate casinos in the Western Cape.
Last summer, the two companies canceled a deal, under the terms of which Tsogo Sun would have paid R2.1 billion for a stake in two Western Cape gambling venues – GrandWest Casino and Golden Valley Casino, owned by its rival Sun International. Following an investigation by the relevant regulators, the country’s Competition Commission recommended that the Competition Tribunal prohibit the deal. If, however, the transaction had been completed, Tsogo Sun would have had influence in all five casinos operating in the Western Cape.
Less than a year after the two gambling companies abandoned the deal, they are now planning to materialize another, less ambitious, idea. Tsogo Sun has announced that it is to purchase a 20% stake in Sun International’s subsidiaries SunWest International and Worcester Casino. The company is to pay the amount of R1.3 billion.
Thus, Sun International would remain in possession of a controlling stake in the two companies and would also allow for its partner Grand Parade Investments to remain involved in the South African gambling industry. People with knowledge of the matter suggested that the proposed deal would be classified as a non-notifiable, which means that it is not likely to be investigated by competition authorities.
In other words, if the deal is considered a simple acquisition of an interest and is thus, not notifiable under the Competition Act, it would likely be completed. Under the terms of the proposed transaction, Tsogo Sun would acquire a 10%, both economic and voting, stake in SunWest International and Worcester Casino for the amount of R675 million. An additional 10% interest in both would be acquired through Grand Parade Investments, once again for a total of R675 million.
Commenting on the potential acquisition of a 20% stake in the two casino companies, Tsogo Sun said that this is an attractive investment opportunity that would provide it with an interest in excellent casino assets in South Africa’s Western Cape and would, thus, increase its exposure in the region. The company already controls Mykonos Casino, The Caledon Casino, and Garden Route Casino.
Source: Casino News Daily