SkyCity Reveals It Rejected Two Takeover Offers

SkyCity Entertainment Group has revealed that it rejected two takeover proposals received in May after deciding neither adequately reflected the underlying value of the company.

The New Zealand casino operator disclosed the approaches on 25 August following media speculation about potential takeover interest.

One proposal came from a special situations fund managed by Oaktree Capital Management and offered NZ$0.70 in cash for each SkyCity share.

A second bidder offered an implied NZ$0.75 per share.

Based on SkyCity's approximately 1.1 billion issued shares, the proposals valued its equity at around NZ$772 million and NZ$827 million respectively.

Both proposals were confidential, unsolicited, conditional and non-binding.

SkyCity Board Rejects the Offers

SkyCity's board considered the proposals with assistance from management and advisers before unanimously deciding not to proceed.

The company said the offers did not adequately reflect SkyCity's underlying value and that some of the conditions attached to the proposals were problematic.

Both potential buyers wanted at least eight weeks to conduct due diligence and needed to arrange debt financing.

The proposed transactions were also dependent on several conditions, including shareholder and regulatory approval.

Iris Capital Identified as Second Bidder

SkyCity initially did not identify the company behind the higher proposal.

Australian media has since reported that the second bidder was Iris Capital, the hospitality and gaming group owned by Sydney businessman Sam Arnaout.

Iris Capital owns a substantial portfolio of hotels and gaming venues in Australia, including Casino Canberra and Lasseters Hotel Casino in Alice Springs.

Oaktree, meanwhile, is no stranger to the casino sector. The investment manager has previously pursued opportunities involving major Australian casino businesses Crown Resorts and Star Entertainment Group.

SkyCity Leaves Door Open to Better Offer

Despite rejecting both proposals, SkyCity has not completely closed the door on a potential takeover.

The company indicated that it was prepared to engage further and potentially provide due diligence information if either party submitted a revised proposal addressing the board's concerns.

So far, neither bidder has returned with an improved offer.

The takeover interest comes at a challenging time for SkyCity.

The company recently reported a 37.6% decline in net profit after tax to NZ$18.2 million for the year ended 30 June 2026, while EBITDA fell 44.2% to NZ$120.5 million.

SkyCity has also been working to strengthen its financial position through an asset monetisation programme.

The group recently confirmed property sales around its Auckland precinct and is considering the potential sale of The Grand Hotel. A strategic review of SkyCity Adelaide is also underway.

Could Another SkyCity Offer Be Coming?

The disclosure confirms there has been serious outside interest in acquiring one of New Zealand's biggest gambling companies.

Neither of the May proposals progressed after SkyCity rejected their valuations and conditions, but the company has made it clear that it is willing to consider a better offer.

With SkyCity restructuring parts of its business, selling assets and reviewing the future of its Adelaide casino, further takeover interest cannot be ruled out.