Delay threatens Sun International deal

GAMING and leisure company Sun International has already seen one proposed transaction scuppered this year because of competition issues.

Early this year, deliberations by competition authorities delayed the proposed reshuffling of Western Cape assets by Sun International and Tsogo Sun for so long that both parties felt it prudent to walk away from the proposed deal.

Now Sun International’s plans to finalise its deal to take over Peermont look set to be delayed until at least the second half of next year.

The company reported on Monday that the proposed deal — which the Competition Commission has recommended prohibiting — will only be heard by the Competition Tribunal next June. The reluctance to recommend the deal comes despite Sun International hinting strongly that the Peermont acquisition — which really revolves on the Gauteng-based Emperors casino — would trigger the sale of numerous smaller casino properties. The big hitch is that the tribunal’s approval is a condition precedent to the Peermont deal — which was stamped with a “long stop” completion date of March next year.

It is likely Sun International will be shuffling its options vigorously during the Christmas break to secure an extension to the “long stop” date or another significant amendment to the terms of the proposed deal with Peermont.

Peermont, on the other hand, is sitting pretty in the knowledge that should the deal falter, there is a sizeable compensation in a “break fee” that will need to be paid over by Sun International.

SIRIUS Real Estate has been the standout performer among new property listings this year, achieving 44.07% share price growth. It is likely to still offer upside for South African investors. Sirius owns and operates business parks, offices and industrial complexes across Germany.

Sirius, which has a primary listing on London’s AIM, has become AltX’s largest counter, with a market cap of R6.3bn. Much of its domestic support has come from boutique asset managers including Anchor Capital and ClucasGray.

Old Mutual and Sanlam Collective Investments have also subsequently bought into Sirius.

The company has provided consistent income payouts to its investors. It earned an 85% increase in profit before tax and a 63% rise in earnings per share for the interim period to September.

Analysts believe Sirius stands out as a rand hedge investment for South Africans because it is the only JSE-listed property fund that invests purely in Germany, Europe’s largest economy.

That country also has attractive property fundamentals that are sure to underpin the fund’s performance in the future.