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Proposed Sun International merger removed from roll

Mar 08 2016 18:57
Carin Smith

Johannesburg - Sun International (Sisa) and Maxshell 114 Investment - the ultimate controlling shareholder of Peermont Global - informed the Competition Tribunal on Tuesday at a pre-hearing that there was uncertainty concerning a proposed merger.

The proposed merger would have seen hotel and casino group Sun International acquire the entire shareholding of Maxshell and Peermont become a wholly-owned subsidiary of Sisa. Peermont is a hotel and casino operator and controls seven casinos in SA.

The merger was prohibited by the Competition Commission, which found, among other things, that the transaction would prohibit competition in the central Gauteng market and that "there could be coordination of behaviour to the detriment of consumers". It did not accept the so-called “behavioural remedies” submitted by the parties.

READ: Sun International to buy Peermont for R9.5bn

The Tribunal said the dates for the hearing have since been removed from its roll and the hearing timetable has been suspended.

The Tribunal has directed that, should the merging parties become aware that the proposed transaction will not be taking place, they should file the appropriate notice.

Michael Farr, Sun International's group general manager: corporate brand and communications, told Fin24 that the approval of the Tribunal has always been a condition precedent to the proposed transaction, which must be fulfilled by March 31 2016 - also referred to as the “long stop date”.

"Given the timing we were given for the Tribunal hearings – June 2016 - it became impossible for the condition precedent to be met by the long stop date," said Farr.

"As a consequence, it is anticipated that the transaction will terminate on the long stop date and we are in the process of negotiating to cash settle the Menlyn Maine note for R675m on April 30 2016 in settlement of all claims."

ALSO READ: Subdued casino trading impacts Sun International


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