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Jerome García November 27, 2023 3 min read
Sun International Confirms Discussions about an Acquisition
The company released a cautionary statement, confirming it is currently in talks about a potential acquisition
The leading gaming, hospitality and entertainment giant that currently holds approximately 43% of the casino market in South Africa, Sun International, hinted at plans for a potential acquisition. The company advised its shareholders on Monday that it is currently in talks about a possible acquisition. Details on the matter are scarce with Sun admitting that the ongoing negotiations are not certain, and it is yet to be determined whether the acquisition will go ahead or not.
Moreover, the company confirmed that if the acquisition is greenlighted it may have a material effect on the price of its securities. “Accordingly, Sun International shareholders are advised to exercise caution when dealing in the Company’s securities until a further announcement is made,” explained Sun International in a statement.
“Sun International shareholders are advised that the Company is in discussions and negotiations regarding a potential acquisition. Whilst there is currently no certainty that the Proposed Transaction will be concluded or implemented thereafter, the Proposed Transaction, if concluded, may have a material effect on the price of the Company’s securities,“reads a cautionary announcement by Sun International
Sun refrained from disclosing additional details regarding the possible business transaction. It is yet to be confirmed whether this transaction may involve an acquisition of another company or a partial sale of assets belonging to Sun. Whatever the case is, the company is yet to officially disclose more details regarding the company or companies it is currently negotiating with.
The Potential Acquisition Follows a Successful First Half of 2023
The announcement about the possible acquisition comes during a busy period for Sun International. Earlier this year, the company released its first half of 2023 results, uncovering exceptional performance for the six months ended June 30, 2023. At the time, the company revealed that its income hit ZAR 5.78 billion ($309.6 million). This result, compared to the corresponding period in 2022, showed an increase of nearly 12% year-over-year.
Moreover, Sun confirmed that the results come despite a challenging period considering the “significant increase in diesel costs and other cost pressures.” For the first half of 2023, the company posted ZAR 1.57 billion ($84.2 million) in adjusted EBITDA, a result that marked a year-over-year increase of 5.6%.
Similarly, adjusted headline earnings for the first half of 2023 increased. Last year, adjusted headline earnings halted at ZAR 444 million ($23.8 million), while this year, they soared by 10.1% to ZAR 482 million ($25.9 million). As with other acquisitions within the gambling sector, Sun may be looking to increase the value for its shareholders.