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Monday, 18 December 2023 12:09

Sun International swoops on unlisted gaming company Peermont Group.

By Lehlohonolo Lehana.

JSE-listed Casino, gaming and hotel group Sun International is set to buy the Peermont Group and its flagship Emperors Palace resort in Kempton Park for R7.3bn.

The company, valued at about R11bn on the JSE, said in Monday's announcement that 62.54% of its shareholders have provided support for the proposed deal in writing, but the deal remains subject to approval.

The Peermont group, which was established in 1995, operates 11 properties across SA and Botswana, as well as the online sports and entertainment betting site PalaceBet.

Emperors Palace makes up a significant portion of the entire Peermont portfolio and is a leading gaming destination in Gauteng, complemented by four hotels, a health and beauty spar, as well as dining and entertainment and a cinema.

"The addition of Peermont's land-based casinos to our portfolio, underpinned by the flagship Emperors Palace Resort, will enhance the quality of earnings and cash flow generation of the group,"  Sun International CEO Anthony Leeming said in a statement.

"This is consistent with the group's strategic intent to focus its portfolio on large urban casinos with the ability to drive value-enhancing strategies across smaller regional assets and online growth," he said.

Founded by the late hotel and casino magnate Sol Kerzner in the 1970's, Sun International owns landmark casino resorts like Sun City and Wild Coast Sun. 

Sun International's debt load will more than double, to over R13 billion, if the transaction secures the relevant approvals and is implemented as a full takeover.

"The purchase consideration will be funded by new debt facilities, estimated to result in Sun International's South African debt levels as at 30 June 2023 of R5 926 million increasing to approximately R13 186 million, calculated on a pro forma basis, after the implementation of the proposed transaction," Leeming added