SUN INTERNATIONAL LIMITED - Joint announcement update relating to SILs proposed acquisition of a material shareholding in GPI Slots

Joint announcement – update relating to SIL’s proposed acquisition of a material shareholding in GPI Slots

            SUN INTERNATIONAL LIMITED                            GRAND PARADE INVESTMENTS LIMITED
   (Incorporated in the Republic of South Africa)            (Incorporated in the Republic of South Africa)
       (Registration number: 1967/007528/06)                     (Registration Number 1997/003548/06)
                    Share code: SUI                                         Share code: GPL
                  ISIN: ZAE000097580                                       ISIN: ZAE000119814
                         ("SIL")                                                  ("GPI")



JOINT ANNOUNCEMENT - TRANSACTION UPDATE RELATING TO SIL’S PROPOSED ACQUISITION OF A MATERIAL
            SHAREHOLDING IN GPI SLOTS PROPRIETARY LIMITED ("GPI SLOTS") FROM GPI

SIL and GPI shareholders are referred to the circular issued by SIL and GPI (the "Parties") respectively to their
shareholders on 21 July 2014 in respect of the agreement reached by the Parties whereby SIL, through its
subsidiary Sun International (South Africa) Limited agreed to acquire up to a 70% interest in GPI Slots, a
wholly-owned subsidiary of GPI ("the GPI Slots Transaction"). GPI Slots is the holding company of GPI’s
limited payout gaming operations that own and operate limited payout machines. The GPI Slots
Transaction was structured in 3 tranches whereby SIL would acquire up to a 70% interest as summarised
below.

        Investment One
        Acquisition of a 25.1% interest in GPI Slots with an effective date of 1 July 2014 ("Investment One").
        Investment One became unconditional and was implemented in December 2014, as previously
        announced to shareholders. The purchase consideration paid by SIL for the 25.1% equity interest
        was R238.1 million and proportionate share of shareholder loans was R72.7 million.

        Investment Two
        Acquisition of a 25.0% interest in GPI Slots with an effective date of 1 July 2015 ("Investment Two").
        Investment Two was subject to, inter alia, the approval of the competition authorities as well as the
        relevant gambling boards. SIL and GPI shareholders are advised that all conditions precedent to
        Investment Two have now been fulfilled and accordingly Investment Two will be implemented
        immediately. Consequently SIL will now have a controlling interest in GPI Slots.

        The Investment Two purchase consideration was based on an equity value of GPI Slots determined
        by applying a 7.5 times EBITDA multiple to the actual GPI Slots EBITDA for the year ending 30 June
        2015. The purchase consideration payable by SIL for the 25.0% equity interest is R274.5 million and
        proportionate share of shareholder loans is R53.7 million.

        Investment Three
        Acquisition of a 19.9% interest in GPI Slots with an effective date of 1 July 2016 ("Investment Three").
        The Investment Three purchase consideration will be based on an equity value of GPI Slots
        determined by applying a 7.5 times EBITDA multiple to the actual GPI Slots EBITDA achieved for the
        year ending 30 June 2016. Investment Three is subject to, inter alia, the approval of the relevant
        gambling boards. The Parties will commence preparing and making submission to the relevant
        gambling boards to obtain approval for implementation of Investment Three.

GPI Slots has been a fast growing business with EBITDA growth of 43% from 2014 to 2015 which growth
included the acquisition of KZN Slots. Excluding acquisitive growth, organic EBITDA growth was at 31%. The
GPI Slots Transaction was structured in 3 tranches to ensure that GPI benefited from the growth of the
business. This structure has also allowed SIL to average the cost of its investment into GPI Slots. The blended
cost of the 50.1% investment to date equates to a blended 6.7 times 2015 EBITDA multiple.


Sandton
5 April 2016

Sponsor to SIL
Rand Merchant Bank, a division of FirstRand Bank Limited


Sponsor to GPI
PSG Capital

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