Sun City. Picture: SUPPLIED
Sun City. Picture: SUPPLIED

The proposed merger between Sun International’s Chile-based gaming business Sun Dreams and the gaming assets of casino and hospitality group Marina del Sol has been put on hold after the parties failed to agree on a memorandum of understanding.

Private equity firm Clairvest and Empresas Valmar, a Chilean real estate company, own Marina del Sol.

Sun International owns 64.94% of Sun Dreams, while Nueva Inversiones Pacifico Sur Limitada (Pacifico) holds 35.06%.

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.

The proposed merger is in line with Sun International and Pacifico’s intentions to grow Sun Dreams into a casino and hospitality group with critical mass in Latin America that can capitalise and develop future business opportunities in South America, Mexico and the US while “mitigating future challenges and risks to the business and concentration of assets in any one country in Latin America”.

Sun Dreams operates a number of casinos, hotels, as well as entertainment and food and beverage facilities in Central and South America.

In a statement to shareholders in May, Sun International said the merger could lead to the listing of Sun Dreams on the Santiago Stock Exchange in Chile.

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% stake in Sun Dreams to Pacifico has been delayed. The transaction will result in each company holding a 50% 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.

njobenis@businesslive.co.za