Supplier News
Chile – Sun International to increase share of Monticello
By Lewis - 14 July 2014
Sun International is seeking to acquire the majority of the remaining stake in Chile’s Monticello casino for around US$114m. Sun currently owns a minority stake in the casino. The deal will see Sun acquire a 54.7 per cent equity interest in the Monticello Grand Casino in Chile to add to its 44.2 percent stake in the property. Sun also will acquire shareholder loans and cash totalling about $32m. Sun is to acquire another 10.5 per cent stake from minority shareholder Chilean Enterprises and has also made an extended offer to buy the remaining 1.1 per cent in Monticello held by Lasud Chile.
“The acquisition of this additional stake is in line with our stated intention to grow our presence in Latin America and in particular Chile, which has a well regulated gaming industry and good growth prospects,” Sun CEO Graeme Stephens said in the statement. “It provides us with control over a great asset and a free hand to use and incorporate it into our wider strategy for Latin America.
“The transaction provides the company with the opportunity to positively leverage its investment in Monticello, which is well entrenched as the leading gaming and entertainment destination in Chile. It provides the opportunity for Sun International to acquire an increased economic interest in, and gain strategic control over, what is regarded as one of [Latin America’s] best casinos,” the group said.
It also acted as a catalyst for the establishment of a portfolio of premier assets in the region, as well as providing the platform for further growth and consolidation for the group’s strategic position in the casino industry.
Monticello, located in Mostazal, Chile, is one of two casinos serving the national capital of Santiago. The casino, which cost $262 million to develop and opened in 2008, features 1,880 slot machines, 80 tables and 300 bingo positions, as well as a 155-room, five-star hotel and spa, conference center, retail and entertainment.
Stephens said the Monticello, which Sun has developed and managed since the project began, forms the cornerstone of the company’s offshore strategy. The casino is one of the two casinos that services the Santiago market and has, in the quarter to March, increased its market share from 65.3 per cent to 72.5 per cent. In the half-year results to December, the casino recorded a decline of 22 per cent in revenue due to the impact of the new anti-smoking regulations. As the result of the new anti-smoking laws, four new smoking decks were opened towards the end of last year. This has had a positive effect on the casino’s revenue, which rose 28.4 per cent between March and May this year.
The transaction would be fulfilled on unconditional approval by the Chilean gambling board and the approval from Sun International shareholders.
Sun also plans to open its new Ocean Club Casino in Panama City in September this year at an estimated cost of $105 million. The casino, part of the Trump Ocean Club International Hotel and Tower, will feature 600 slot machines and 32 gaming tables.
