South Africa’s Sun International is raising its stake in Chilean casino group Sun Dreams to 65 per cent from 55 per cent in a deal valued at about R2bn (€1.35bn approx.)
The JSE-listed hotels and casino group said one of its three partners in Sun Dreams‚ Entretenimientos Del Sur Limitada‚ had opted to sell its 20 per cent holding.
EDS said in March it wanted to do this by selling its shares via an initial public offering.
Rather than proceeding with the IPO‚ Sun International and the third partner‚ Pacifico‚ agreed to buy out EDS for $126m. Pacifico will raise its stake in Sun Dreams to 35 per cent from 25 per cent as a result of the deal.
Tuesday’s statement said Pacifico could exit its investment in due course via a Sun Dreams IPO‚ but Sun International had an option to buy out Pacifico if it did not find the IPO attractive.
The company said that the proposed acquisition, aside from increasing Sun International’s shareholding in Sun Dreams to approximately 65 per cent‚ which is aligned with its strategic objective of increasing its interests in Latin America‚ also eliminates the risks of having both EDS and Pacifico exercising their put options against Sun International for their entire shareholdings in Sun Dreams.