Sun International’s Peermont Deal Uncertain After CompCom’s Recommendation
JSE-listed gaming and resorts group Sun International’s proposed acquisition of Peermont Holdings hangs in the balance after the Competition Commission (CompCom) recommended that the transaction be prohibited.
The owner of Sun City and Grand West casinos confirmed the CompCom’s position on the matter in a Sens statement on Friday. However, it noted that the Competition Tribunal will have the final say on the deal.
The Competition Tribunal will now deliberate on whether the transaction should get the green light or be rejected. Sun International’s share price firmed by almost 1% in afternoon trade, following the announcement.
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The gaming group announced its intention to purchase Peermont – the owners of Emperors Palace casino complex in Kempton Park as well as several smaller casinos across the country – in December 2023. Sun Peermont CompCom
In its statement, Sun International said it has been notified by the CompCom that the commission has recommended to the Competition Tribunal that the proposed transaction be prohibited “in terms of section 14A (1)(b)(iii) of the Competition Act, No. 89 of 1998, as amended.”
While details of the prohibition are yet to be revealed, it is likely due to the prospect of increased concentration in SA’s land-based casino industry if the deal goes ahead.
Sun International said it will evaluate the CompCom’s report containing the reasons and recommendations for the prohibition once received.
“In the interim, the Competition Tribunal will begin its review and deliberation of the proposed transaction which it may still approve despite the recommendation made by the Competition Commission. Shareholders are reminded that the approval of the Competition Tribunal is a condition precedent to the proposed transaction.
“Shareholders will be kept apprised of developments in this regard,” it added.
Sun International’s major competitor is Tsogo Sun Limited, which is also listed on the JSE. Tsogo owns Montecasino and Gold Reef City in Johannesburg, the latter through its acquisition of Gold Reef Resorts several years back. Peermont CompCom
Peermont is also listed on the JSE.
