Sun International puts merger with Marina del Sol on hold

Both parties failed to agree on a memorandum of understanding.

The owner of casino and assets across South Africa and Latin America, Sun International, said the merger between its Chile-based gaming business Sun Dreams and Marina del Sol has been put on hold after both parties failed to agree on a memorandum of understanding.

Casino and hospitality group Marina del Sol is owned by private equity company Clairvest and Empresas Valmar, a Chilean real estate company.

Sun International owns 64.94 percent of Sun Dreams, while Nueva Inversiones Pacifico Sur Limitada (Pacifico) holds 35.06 percent. Sun International and Pacifico entered into a memorandum of understanding with Clairvest and Empresas Valmar earlier in 2019 that would have paved way for the merger.

Ahead of this deal, Sun International would sell a 14.94 percent interest in Sun Dreams to its partner Pacifico for $86-million, reducing its equity interest to 50 percent.

A successful merger would see Sun International have a 31 percent stake in the biggest casino company in Chile and one of the largest in the region with annual revenue of about $500-million. It would own and operate 21 casinos, including 11 in Chile, eight in Peru and one each in Colombia and Argentina.

The merger could also lead to the listing of Sun Dreams on the Santiago Stock Exchange in Chile, Sun International said when it announced the deal in May. 

But in a statement on Friday, Sun International said the parties to the proposed merger failed to conclude the deal by the deadline of October 31. As a result, the memorandum of understanding between the different companies has lapsed, Sun International said.

“The parties have agreed that they will continue to consider a potential merger which may result in a transaction at a later stage, in which event shareholders will be advised accordingly.”

Meanwhile, Sun International said on Friday that the sale of a 14.94 percent stake in Sun Dreams to Pacifico has been delayed. The transaction will result in each company holding a 50 percent equity interest in Sun Dreams.

“Shareholders are advised that to date the parties have not yet received approval for the proposed disposal from the Superintendencia De Casinos De Juego, the casino regulator in Chile, by the long-stop date of October 31 2019. Sun International is engaging with Pacifico regarding an extension to this date,” Sun International said.