SkyCity starts structured sale review amid continued takeover interest

After persistent takeover interest, SkyCity Entertainment Group plans a structured process aimed at drawing proposals covering the entire business. At the annual shareholders' meeting in Auckland on 21 October, Chair Julian Cook said the board had turned down two unsolicited, non-binding proposals received earlier in the year, judging them opportunistic, and no improved or new whole-of-business proposals had arrived since. He added that the board "remains aware of continued interest in the whole business," according to the addresses filed with the NZX and ASX.

This process will see the company talk with interested parties and provide them with a portion of due diligence information so they can put proposals together. UBS and Chapman Tripp are serving as investment banking and legal advisers, while a Structured Review sub-committee set up by the board will supervise the effort. Cook made clear that no transaction or offer is guaranteed to result. The company had previously said it turned down two conditional takeover proposals.

In a separate development, SkyCity has launched a formal sale process for its Adelaide casino. This follows a non-binding heads of agreement with South Australia's Minister of Consumer and Business Affairs aimed at settling outstanding regulatory matters. A fine of A$21 million forms part of that agreement, extending the push toward an Adelaide sale that was signalled in September.

Walbridge stated: "We believe we can compete strongly in this important market." He also noted that the company will monitor advertising levels closely once the market launches in the second half of FY27. Work on testing for the new regime has begun, and GLI has been approved as a test lab.

Underlying revenue for FY26 was broadly flat at NZ$822.7 million, and gaming revenue declined 5.9% as carded play rolled out across SkyCity's New Zealand casinos and premium play softened. Underlying EBITDA fell 22.3% to NZ$181.6 million. According to SkyCity, trading in the first quarter of FY27 matched the fourth quarter of FY26, with consumer conditions in New Zealand and Australia remaining subdued.

Capital expenditure is expected to land in the middle of the NZ$80 million to NZ$100 million range, with a further NZ$30 million for online licence costs. Cost savings are targeted at NZ$30 million in FY27 and NZ$70 million in FY28. Formal guidance is being withheld because the timing of online market entry has yet to be settled.