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Tsogo Sun and Gold Reef Resorts merger approved
Business Day
11 February 2011
Michael Bleby
The Competition Tribunal ruled today in favour of Tsogo Sun, saying the owner of Johannesburg’s Montecasino could buy smaller rival Gold Reef Resorts without having to sell Gold Reef’s Silverstar casino on the West Rand.
The decision paves the way for Tsogo to complete its long-standing ambition of buying the owner of Johannesburg’s Gold Reef City and Silverstar casinos. Speaking outside this week’s tribunal hearing, Tsogo MD Marcel von Aulock said if the regulator ruled in their favour, Tsogo could wrap up the acquisition "within a week".
Antitrust watchdog the Competition Commission had recommended that the tribunal allow the merger, which would place three of Gauteng’s seven casinos in the hands of one owner, on condition the merged entity sold the Krugersdorp casino. Tsogo owns only Montecasino in the province, while the other four properties are variously owned by Sun International , Peermont Global and London Clubs International.
In the final day of the tribunal’s hearing on Wednesday, the commission argued that Silverstar was the main competitor to Montecasino, in Johannesburg’s Fourways, and that competition would end, to the detriment of customers, if they became part of the same stable.
Counsel representing the casinos, which agreed last year on a R21bn merger, disputed that the casinos were rivals, arguing that casinos competed against other entertainment and leisure outlets such as restaurants and cinemas for disposable income, rather than against other casinos.
The merger of the two groups has been down a long and tortured road that started back in 2005 and has seen a series of twists and turns including Tsogo making a hostile bid for the smaller company.
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