JOHANNESBURG, Jan 29 (Reuters) - South Africa’s top gaming and hotel firm Tsogo Sun Holdings plans to challenge a decision by the competition watchdog to block its acquisition of stakes in units owned by the Sun International hotel group.
The Competition Commission said on Thursday it had ruled against the transaction on the grounds that it could prevent or lessen competition in the gaming and hotel market due to the likelihood of coordination between the merging parties.
The final decision rests with the Competition Tribunal, which takes recommendations from the commission but has in the past overturned decisions by its sister watchdog body.
Tsogo Sun said in May last year it would acquire Sun International’s stakes in SunWest International and Worcester Casino for 2.1 billion rand ($181.8 million), subject to a green light from the Tribunal.
Shares in Tsogo Sun and its smaller rival Sun International fell 4.58 percent and 0.6 percent respectively on the news, while the broad All-share index edged 0.31 percent lower.
Both hotel groups are struggling to fill up rooms as the government and companies spend guardedly due to weak economic growth prospects while high household debt levels have made consumers wary of gambling and leisure travel.
Tsogo Sun has attempted to offset this decline through acquisitions and expansions on its hotels.
$1 = 11.5495 rand Reporting by Zandi Shabalala; Editing by James Macharia