Big blow to Sun City-owner’s R7 billion Emperors Palace deal 

The Competition Commission has recommended that Sun International’s R7.3 billion deal to acquire the owner of Emperor’s Palace be prohibited.

In a SENS announcement released on Friday, 25 October, Sun International said it has been notified that the commission recommended the Competition Tribunal prohibit the deal.

This deal was first announced to shareholders via SENS on 18 December 2023, when Sun International said that it had entered into an agreement with the shareholders of Peermont Holdings.

Peermont is a leading hospitality and entertainment group in South Africa that owns the flagship Emperors Palace Resort.

The deal would see Sun International acquire all of the issued ordinary shares and any claims on loan accounts against Peermont Group.

“The acquisition represents a unique opportunity for Sun International to acquire a group of gaming and hospitality assets of significant scale and quality, together with operating one of the largest, most cash-generative, high-quality casinos situated in a major metropolitan area,” the company said.

“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.”

Sun International currently owns several hotels and resorts across South Africa, including Sun City, the Wild Coast Sun, the Table Bay Hotel and the Maslow in Sandton. It also owns the wildly popular online betting platform, SunBet.

The Peermont Group’s properties house an impressive number of gaming machines and hotel rooms, encompassing 3,349 slot machines, 152 gaming tables, and 1,636 rooms. 

If this deal goes through, Sun International would acquire Peermont’s entire portfolio of 11 properties, including the iconic Emperors Palace resort and online betting platform PalaceBet. 

Therefore, Sun International believes this Peermont acquisition would fit right in with the company’s strategy.

The proposed acquisition would 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. 

In addition, extending the group’s omnichannel strategy across a scaled customer base unlocks operating leverage across revenues, marketing reach, payment processing efficiencies and game liquidity.

When the deal was first announced, it valued the enterprise at R7.3 billion.

However, this deal may not go through following the Competition Commission’s recommendation.

“The detailed report containing the reasons and recommendation made by the Competition Commission to the Competition Tribunal will be reviewed and evaluated by the company once received,” Sun International said.

However, not all hope is lost, as the Competition Tribunal will still begin its review and deliberation and may still approve despite the commission’s recommendation.

“Shareholders are reminded that the approval of the Competition Tribunal is a condition precedent to the proposed transaction,” Sun International said.