SkyCity invites takeover proposals while preparing two New Zealand online licences

At the annual general meeting held in Auckland on 21 October, chairman Julian Cook told shareholders that the board had chosen to seek proposals via a structured process. UBS will serve as investment banking adviser, while Chapman Tripp takes the legal adviser role. Cook warned that the exercise would be lengthy and that no sale or fresh offers were guaranteed.

Two takeover bids were turned down earlier in the year because the company judged that they failed to properly reflect its underlying value. Since then, according to Cook, no improved proposals have arrived, and neither have any new non-binding offers for the whole business, although the board knows potential buyers remain interested. He added that the board still had confidence in SkyCity's existing strategy and would carefully assess any offer capable of delivering greater value to shareholders.

Chief executive officer Jason Walbridge also described how the company intends to enter New Zealand's regulated online casino market. Having first sought the maximum of three permitted licenses, SkyCity is now preparing applications for two. Of the 11 entities that New Zealand's Department of Internal Affairs recently allowed to move on to the formal application stage, the company owns two.

According to Walbridge, the auction price sat within the scenarios SkyCity had modeled, which gave the company confidence that an appropriate return on its investment could be generated. Pursuing two licenses instead of three, he said, was a deliberate capital allocation choice meant to keep the investment within the company's risk-adjusted return targets.

SkyCity believes two advantages will help it win online customers: the casino brand it has already built and the chance to promote its online offering next to its land-based venues. The company has run physical casinos in New Zealand for three decades. Walbridge also highlighted the group's track record in two regulatory areas that span both land-based and online gambling, saying it has dealt with "host responsibility and anti-money laundering requirements" before.

SkyCity anticipates that the regulated market will launch during the second half of financial year 2027, and it plans to keep a close eye on advertising. Competition, though, may prove fierce after that launch. The sale of the group's Auckland properties was announced as complete at the start of September.