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JOHANNESBURG, May 30 (Reuters) - South Africa’s Sun International said on Tuesday it would raise its stake in Latin America-focused Sun Dreams to almost 65 percent from about 55 percent in its bid to expand its gaming and hospitality business abroad.
Stiff competition, fewer available casino licences and consumers feeling the pinch in Africa’s most industrialised nation have pushed the gaming group to broaden its horizons.
Sun International’s Latin American unit Sun Latam and its regional partner Nueva Inversiones Pacifico Sur Limitada (Pacifico) would buy the 19.3 percent stake in Sun Dreams held by Chile’s Entretenimientos Del Sur Limitada (EDS), the South African firm said in a statement.
They would also jointly acquire senior management’s shares in Sun Dreams, or about 0.6 percent of its issued share capital.
Sun Latam would pay $63 million for its half of the stake, Sun International said, raising its holding in Sun Dreams to almost 65 percent. Pacifico’s stake would rise to 35 percent.
Sun Dreams was created last year when Sun International merged its Latin American business with Chile’s Dreams S.A.
EDS told Sun International in March it wanted to launch an initial public offering (IPO) to list Sun Dreams in Santiago or New York, or sell its stake.
“Rather than proceed with the IPO, both Sun International acting with Pacifico elected to each acquire 50 percent of EDS’s shareholding in Sun Dreams,” Sun International said.
Sun Dreams, the largest gaming firm in Latin America, has assets in four countries, including Chile, Panama and Colombia. It runs 13 properties that have six hotels, 25 restaurants, 6,500 slot machines and 33 table games.
“We will continue to explore all viable opportunities for expansion in the region. These include Peru as well as Brazil where licensed casinos may be introduced,” Sun International Chief Executive Anthony Leeming said.
Shares in Sun International, down more than 26 percent in the year-to-date, had slipped 0.41 percent to 63.74 rand by 1026 GMT. (Reporting by Nqobile Dludla; Editing by Jason Neely and Edmund Blair)