South African hospitality giant Sun International has successfully acquired Peermont in a ZAR7.3 billion (£313 million/€363.2 million/$396.6 million) deal, including Peermont’s flagship Emperors Palace resort and online betting brand PalaceBet. The announcement of the deal, made on Monday, was described by Sun International as a “unique opportunity” to obtain a “world-class and highly cash generative” company.

As part of the agreement, Sun International gains control of Peermont’s 11 properties across South Africa and Botswana, along with the PalaceBet online sports betting platform. Emperors Palace, located in Gauteng, stands out as a leading casino resort with 1,695 slot machines, 69 gaming tables, and 757 rooms. Sun International highlighted the resort’s “unique proximity” to the OR Tambo International Airport as a strategic advantage for attracting “high net-worth customers.”

The acquisition received strong support from Sun International’s investors, with 62.54% of shareholders providing written approval for the purchase. The company believes that the transaction will enhance the quality of earnings and cash flow generation, aligning with its strategic intent to focus on large urban casinos.

The move follows a robust first half (H1) for Sun International, with income rising by 11.6% to ZAR5.78 billion (£243.7 million/€284.5 million/$305.3 million) for the six months ending 30 June. Despite a challenging economic climate and increased competition, the group achieved “exceptional growth.” Group adjusted EBITDA for H1 was ZAR1.57 billion, marking a 5.6% increase from H1 2022, while overall profit for the period surged by 41.0% to ZAR485 million.

Sun International had hinted at the potential acquisition in late November, entering discussions without disclosing the identity of the party involved. Shareholders were advised to exercise caution during that period. Sun International shares experienced fluctuations after the acquisition talks were revealed, but after Monday’s announcement, they are currently trading at ZAR3,973 (£170/€197/$215) per share, down 2.24% from today’s opening price.

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