Sun International planned to buy all the remaining stakes in Chilean gaming group Monticello Grand Casino for $146 million (R1.6 billion), the resort operator said yesterday.
This was part of the entertainment group’s plan to expand in Latin America, it added.
Sun International currently owned 44.2 percent of Monticello and would buy an additional 44.2 percent from Austria’s holding company Novomatic.
It would acquire another 10.5 percent stake from minority shareholder Chilean Enterprises, the group said.
It had also made an extended offer to buy the remaining 1.1 percent in Monticello held by Lasud Chile.
In line with its strategy, the group would soon operate the Ocean Club Casino in Panama and had applied for a casino licence in Cartagena, Colombia.
Sun International said the success of Monticello had given the group confidence to look for more opportunities in the region.
“The transaction provides the company with the opportunity to positively leverage its investment in Monticello, which is well entrenched as the leading gaming and entertainment destination in Chile.
“It provides the opportunity for Sun International to acquire an increased economic interest in, and gain strategic control over, what is regarded as one of [Latin America’s] best casinos,” the group said.
It also acted as a catalyst for the establishment of a portfolio of premier assets in the region, as well as providing the platform for further growth and consolidation for the group’s strategic position in the casino industry.
Monticello was opened in 2008 in the Chilean city of Paine at a cost of $262m. It is equipped with 1 880 slot machines, 80 tables and 300 bingo positions.
The casino also has a 155-room five-star hotel and spa, a conference centre and extensive retail and entertainment areas.
The casino is one of the two casinos that services the Santiago market and has, in the quarter to March, increased its market share from 65.3 percent to 72.5 percent.
In the half-year results to December, the casino recorded a decline of 22 percent in revenue due to the impact of the new anti-smoking regulations.
As the result of the new anti-smoking laws, four new smoking decks were opened towards the end of last year. This has had a positive effect on the casino’s revenue, which rose 28.4 percent between March and May this year.
Sun International said that Chile, with its strong growth rate and stable, business-oriented economy, was a compelling investment destination. The country also had well-established gambling laws and a robust and well-regulated gambling industry.
The transaction would be fulfilled on unconditional approval by the Chilean gambling board and the approval from Sun International shareholders.
Sun International’s shares gained 1.62 percent to close trade at R112 on the JSE yesterday.
The group is valued at R1.2bn.