Shares in Sun International [JSE:SUI] plunged over 7% in early morning trade after receiving an unsolicited bid by a Chilean investment company to buy a controlling stake in the owner of Sun City and other casino operations in the country.
Sun International put out a statement on Thursday hitting out at a purported offer saying it is "neither an offer nor a firm intention to make an offer," and has "unfortunately" caused speculation in the company's shares.
The group's shares were trading 7.2% weaker at R16.79 on Thursday morning, after gaining around 20% late on Wednesday evening.
Nueva Inversiones Pacifico Sur (IPS) said in a statement on Wednesday evening that it approached Sun International's board with a "firm intention" to acquire 50.1% of the listed leisure group's shares. It is offering a cash price of R22 per share.
Sun International CEO, Anthony Leeming, told Fin24 on Wednesday evening the group had not yet received a formal offer from IPS.
Sun International said its board had received "several unsolicited, non- binding, indicative proposals from IPS containing varying terms and conditions, similar in nature to the IPS Announcement".
"In the event that a firm intention to make an offer or an actual offer is ever made by IPS, then the Company will at that point respond appropriately, in accordance with law and market practice and in the bestinterests of its shareholders."
Following the publication of the statement by IPS, Sun International's second largest shareholder, Value Capital Partners, said on Wednesday evening the bid price of R22 per share was not sufficient. VCP, which owns approximately 20.23% of the group's shares, said on Wednesday evening it would not allow any company to acquire the the group at "artificially depressed prices".
Last week, the company founded by legendary South African businessman Sol Kerzner, announced a R1.2 billion rights offer as it's operations have been badly affected by the nation-wide lockdown that began at the end of March.
- Additional reporting by Londiwe Buthelezi