South Africa’s Sun International has agreed to buy Peermont including its flagship resort Emperors Palace and online brand PalaceBet.

The deal, announced on Monday, is worth ZAR7.3bn (£313m/€363.2m/$396.6m). Sun International described the move as a “unique opportunity” and the acquisition of a “world-class, high cash generation company” in Peermont.

The agreement will see Sun International receive Peermont’s 11 properties in South Africa and Botswana. The online sports betting site PalaceBet is also there.

Emperors Palace is a leading casino resort in Gauteng with 1,695 slot machines, 69 table games and 757 rooms. Sun International’s announcement noted that the resort’s “unique proximity” to OR Tambo International Airport was an opportunity to attract “high-net-worth clients.”

The move was supported by the group’s investors, with 62.54% of shareholders supporting the purchase in writing. Sun International believes the transaction will “improve the quality of earnings and cash flow generation” of the company.

Sun International wants to maintain the momentum of the strong first half of the year

The acquisition of Peermont follows a strong first half for Sun International, which reported its first half results at the end of September.

Sun International’s revenue rose 11.6% to ZAR5.78 billion (£243.7 million/€284.5 million/$305.3 million) in the six months to June 30. This “extraordinary growth” occurred despite a “difficult economic climate and increasing competition”.

Group adjusted EBITDA was ZAR 1.57 billion in the first half of the year, up 5.6% compared to the first half of 2022. Additionally, total profit for the period was ZAR 485 million, an increase of 41.0% compared to the previous year.

It is also noteworthy that city casino revenue increased by 4.2% to ZAR 3.27 billion, of which casinos accounted for 91.8%. In its announcement of the Peermont purchase, Sun International said the move would support the company’s “strategic intent to focus its portfolio on large urban casinos.”

Sun International secures agreement after November rumors

This move was announced in late November when Sun International announced that the company had begun discussions about a possible acquisition.

The identity and nature of the party were not disclosed, while Sun International advised shareholders to exercise caution when trading its securities until further announcement is made.

Sun International shares fell and then rebounded after the takeover talks were announced. Following Monday’s announcement, they are currently trading at ZAR3,973 (£170/€197/$215) per share, down 2.24% from today’s opening price (December 18).