Sun International Set for Biggest Three-Day Gain in Seven Yearsby
Latin American merger with Dreams approved, prompting surge
Deal will provide ‘significant scale,’ Avior’s Schutte says
Sun International Ltd. headed for the biggest three-day gain in seven years in Johannesburg after the hotel and casino operator won approval for the merger of its Latin American assets with Dreams SA.
The stock jumped as much as 9.9 percent and traded 8.3 percent higher at 12:22 p.m., set for the highest close since Jan. 19. It’s poised for the largest gain since March 2009 in the three sessions after Sun International reported completing sign-off for the transaction from gambling regulators. Volume traded Friday was 299,000 shares, exceeding the three-month daily average.
The deal expands Sun International’s operations in Chile, Panama, Colombia and Peru, giving it “significant scale,” said De Wet Schutte, an analyst at Avior Capital Markets in Cape Town, who rates the stock outperform. “The positiveness about this is that the deal was subject to regulatory approval, and they’ve received that.”
The combination creates Sun Dreams, a business that will “have the profile, critical mass and balance sheet to expand to the rest of the continent, make meaningful acquisitions and take on larger projects,” Johannesburg-based Sun International said in a June 1 statement. “The merger should also unlock synergies between the combined Chilean properties as a result of its scale.”