SkyCity opens whole-business proposal review amid takeover interest

The Auckland annual shareholders' meeting on 21 October was where chair Julian Cook announced the plan. Cook told investors that two unsolicited, non-binding proposals had been turned down earlier in the year, with the board judging them opportunistic. Since then, nothing better and nothing new covering the whole business has come in, yet buyers remain interested, he said.

Interested parties will be engaged by the company, which will open up chosen due diligence material so that they can put proposals together. UBS takes the investment banking adviser role, and Chapman Tripp supplies legal advice. A Structured Review sub-committee has been formed by the board to keep watch over the process. Cook cautioned that a transaction or an offer will not necessarily follow from the review, and that it does not signify a replacement has arrived for the approaches already turned down.

A formal process to sell the Adelaide casino has also been launched by SkyCity, running next to the whole-business review. It comes after a non-binding heads of agreement was reached with South Australia's Minister of Consumer and Business Affairs over outstanding regulatory matters, and that agreement carries an A$21 million fine. The sale push was flagged in September, and this process stays apart from the structured review of the entire group.

SkyCity's successful bid in the auction was confirmed by the company on 13 October. The licences being sought fall under the Online Casino Gambling Act 2026, and each one carries a price of NZ$15 million. Jason Walbridge, the chief executive, attributed the choice of two licences rather than the maximum of three to the group's capital allocation priorities and its risk-adjusted return targets. Approval would give SkyCity two of the 15 permitted brands in the regulated market.

The annual market was put by Cook at over NZ$1 billion, and Walbridge voiced confidence that the group can compete in it. Advertising levels will be watched closely by the company once the market opens in the second half of FY27. GLI has been approved as a testing laboratory, and testing for the regime has already begun.

Underlying revenue for FY26 came in at NZ$822.7 million, broadly flat year on year. Gaming revenue dropped 5.9%, a decline tied to carded play being rolled out across the New Zealand casinos and to weaker premium gaming. Underlying EBITDA was 22.3% lower at NZ$181.6 million. The first quarter of FY27 traded in line with the last quarter of FY26, and consumer conditions stayed subdued in both New Zealand and Australia.

Capital expenditure is expected by SkyCity to land near the middle of a NZ$80 million to NZ$100 million range, with NZ$30 million of online licence costs on top. Savings of NZ$30 million are the FY27 goal, rising to NZ$70 million in FY28. Formal guidance has been withheld by the company, since the date of its online market entry is still not fixed.