New Zealand casino operator received two takeover offers in May, which were rejected as they did not reflect the underlying value of the company
Casino operator SkyCity Entertainment Group has revealed that it recently rejected two takeover offers that undervalued the company and included “problematic” conditions.
Responding to media speculation that it was in discussions with US private equity firm Oaktree Capital in relation to a potential takeover of the company, SkyCity revealed that it had received two unsolicited, non-binding takeover proposals in May.
The first offer was from funds managed by Oaktree Capital Management to acquire all of the issued shares in SkyCity at an indicative price of NZ$0.70 cash per share, while a second offer came from an unnamed party at an implied indicative price of NZ$0.75 cash per share.
Both indicative proposals were subject to numerous conditions, including a period of at least 8 weeks due diligence and arranging debt financing.
SkyCity said that the proposals were also conditional on agreement on transaction structure, negotiation of binding documentation, unanimous SkyCity board support, SkyCity shareholder approval, regulatory approvals, and acquirer internal approvals, amongst other matters.
SkyCity was also requested by one or both parties to not enter into any binding agreement to acquire or dispose of any assets (including under the asset monetisation program), provide exclusivity, and retain its existing debt facilities.
The SkyCity Board said it carefully considered these indicative proposals, with input from management and advisers, but unanimously determined that the proposals did not adequately reflect the underlying value of the company, and that the conditions were “problematic.”
Both parties were advised that SkyCity was not prepared to proceed on the terms proposed.
SkyCity indicated to each party that it was prepared to consider engaging further, including providing due diligence information, if they provided a revised proposal which addressed these issues.
Neither party submitted a revised, improved proposal.
SkyCity continues to focus on executing on its strategic priorities as set out in its FY26 results announcement last week.
This includes its ongoing asset monetisation program, which is expected to deliver gross proceeds of between NZ$275 million and NZ$300 million across the unconditional sale of the 99 Albert Street and Victoria Street investment properties for $74.5m, and the non-binding heads of agreement for a sale of the Grand Hotel.
Shares in SkyCity Entertainment Group Ltd (NZE:SKC) closed 1.50 per cent higher at NZ$0.68 per share in Auckland earlier Tuesday, and were unchanged at A$0.56 in Sydney (ASX:SKC).