Sun International brushes potential bid aside


Sun International brushes potential bid aside

Published Date: 2020-06-26 | Source: Stephen Gunnion | Author: Stephen Gunnion

Sun International brushes potential bid aside

The hotel and casino operator says its Latin American partner has not yet made an actual offer nor addressed any of its concerns.

Sun International says its pushing ahead with a proposed rights offer despite an offer of support from Nueva Inversiones Pacifico Sur (IPS). The hotel and casino operator says it has received several unsolicited, non-binding proposals from the Chilean investment company - but with nothing concrete on the table.

Sun International outlined its proposed R1.2 billion capital raise on Wednesday morning, just hours before news broke that IPS wanted to buy 50.1% of the group for R22 per share and would also provide a bridge loan of up to R1.2 billion - as well as partially underwrite the rights issue. Value Capital Partners, Sun's second-biggest shareholder with more than 20% of its stock, has already dismissed the offer as too low.

IPS, which owns a bigger than 30% stake in Sun International's Latin American subsidiary, Sun Dreams, has not yet made a formal announcement. Sun International said it had also failed to adequately address the concerns it had consistently raised, including a significant and material litigation claim.

According to Reuters, the dispute involves plans announced a year ago for Sun International to reduce its stake in Sun Dreams to 50%, making IPS an equal partner in the business. Despite not addressing this, Sun International said IPS "saw fit to publish its unsolicited IPS announcement in a manner which has unfortunately caused speculation in the Sun International share". The group's stock surged 22% just before the close of trade on Wednesday.

Sun International said if IPS announced a firm intention to make an over or an actual offer, it would respond at that point appropriately, in accordance with market practice and in the best interests of its shareholders. For now, it said it remained focused on the rights offer, which will be put before shareholders at a general meeting on 13 July.

Meanwhile, VCP CEO Sam Sithole Tweeted that its was "pathetic" to think that Sun International's shareholders would sell a controlling stake in the group for such a price.

After declining as much as 10% in morning trade, Sun International's shares retraced most of their losses to close 0.2% down at R18.07.

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