Sun International returns to Botswana

Peermont owns 60 percent in Grand Palm with BDC holding the remainder. PIC: KAGISO ONKATSWITSE
Peermont owns 60 percent in Grand Palm with BDC holding the remainder. PIC: KAGISO ONKATSWITSE

International resort hotel chain, Sun International, plans to acquire hotel and gaming company, Peermont group that owns hotels and casinos in South Africa and Botswana in a R 9.43 billion (P7.73 billion) deal.

The move will see Sun international, which divested from Gaborone Sun Hotel last year, bouncing back into Botswana and taking over Peermont’s Grand Palm hotel, Mondior, Metcourt Inn and the casino at Sedibeng hotel in Francistown.

In South Africa, Peermont owns eight resort and gaming operations including Emperors Palace in Gauteng and Graceland in Mpumalanga.

Sun International would part-fund the acquisition through the issue of 10.4-million shares at R120 a share to Peermont shareholders, which would be valued at R1.25-billion.

It would also further use the proceeds from a proposed R3.7-billion rights offer to part-fund the deal; roll over R3.75-billion of Peermont’s senior debt and enter into a new R575-million debt facility.

The proposed deal is expected to close within 9 to 12 months.

Peermont will however takeover the majority stake of 60 percent in the Botswana assets as the 40 percent remainder in Grand Palm hotel, Mondior, Metcourt is held by the Botswana development corporation.

Sun International group general manager for corporate brand and communication, Michael Farr told Mmegi Business that a decision has not been made yet on whether the Botswana assets would be rebranded back to the Sun marque.

“With Emperors Palace being the key asset in the Peermont portfolio, Sun International will conduct a review of the remaining Peermont portfolio acquired to ascertain the strategic fit of the various assets within the Sun International portfolio.

 “While the Peermont portfolio of assets will initially increase the exposure and proportion of the combined business that arises in Southern Africa, it also opens the possibility of further restructuring of local assets, with a medium term objective of creating a portfolio of fewer, larger, quality assets. Branding decisions will be made once the strategic review has been finalised,” he said.

Last year, Sun International tied a deal to sell Gaborone Sun Hotel, other Botswana assets and three of its other hotels in the Southern African region to a Thai company in a R661million (P528 million) deal.

The mechanics of the deal was Sun International selling the hotel businesses to the Asian leisure giants while it retains the casinos operations.

If granted regulatory approval, the acquisition of Peermont’s assets in Botswana will result in Sun International owning two of the three casino operations in Gaborone.

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