South African hotel and casino operator Sun International Ltd says an arrangement that would have made a Chilean gaming monster is off the table, at least for now. In May, Sun Int’l declared a memorandum of understanding (MOU) to consolidate Sun Dreams S.A., the Latin American gaming unit in which Sun Int’l holds a majority stake, with Marina del Sol. Marina del Sol is a gaming operator this is jointly owned by the Clairvest Group, a private equity management company, and Chilean real estate firm Empresas Valmar. The deal could be put back on the table at a later date, but failure to adhere to stipulations outlined in the MOU forced Sun Int’l to call off the merger.
The arrangement would have made one of Latin America’s biggest gaming organizations, controlling ten of Chile’s 26 gambling clubs in Argentina, Colombia and Peru. In any case, Sun Int’l reported last Friday that the group had “failed to conclude the proposed merger as envisaged” by the October 31 cutoff time and “consequently the MOU has lapsed.”
Sun Int’l said the companies have concurred that they would “continue to consider a potential merger which may result in a transaction at a later stage,” and that it would update investors as needed.
The company additionally informed investors that its proposed transfer of about 15% in Sun Dreams to the Chilean unit’s minority partner, Nueva Inversiones Pacifico Sur Limitada, had neglected to collect the endorsement of Chile’s gaming controller, the Superintendencia De Casinos De Juego (SCJ), by the “long stop date” of October 31. Sun adds that it is currently “engaging with Pacifico regarding an extension to this date.”
Sun said its Sun Dreams tasks have been “negatively impacted” by the social distress that has shaken Chile in the course of recent weeks. The Sun Dreams gambling clubs have endured confinements on their working hours and, on occasion, have been compelled to totally close down activities.
Certain Sun Dreams properties have likewise endured “some harm” because of the fights. Sun Int’l cautioned financial specialists that these disturbances would have an unquantified negative impact on the organization’s 2019’s full-year results.
Incidentally, in September, Sun Int’l told investors it was considering new possibilities in Latin America – including web-based betting under its SunBet brand – to counterbalance diminished consumer spending in its center South African market. For the first half of the year, income from its South African operations was up 2% to about US$368 million, while LatAm income increased by 17% to about $187.4 million on account of the late-2017 procurement of a few Peruvian gaming activities.