SkyCity Entertainment Group has rejected two unsolicited takeover proposals received in May, including a NZ$0.70-per-share bid from a special situations fund managed by Oaktree Capital Management.
The New Zealand-headquartered casino operator disclosed the approaches on August 25 following media reports about a possible takeover. A second, unnamed bidder proposed an implied price of NZ$0.75 per share.
Based on SkyCity’s 1,103,055,047 ordinary shares, the proposals valued the company at approximately NZ$772 million and NZ$827 million respectively. Both remained confidential, conditional and non-binding.
SkyCity’s board reviewed the approaches with management and advisers before unanimously deciding that neither proposal adequately represented the company’s underlying value.
“The SkyCity Board carefully considered these indicative proposals, with input from management and advisers. The Board unanimously determined that these proposals did not adequately reflect the underlying value of the company, and that the conditions were problematic. Accordingly, the parties were advised that SkyCity was not prepared to proceed on the terms proposed.”
The company said it remained willing to consider further discussions if either party submitted a revised offer addressing the board’s concerns. Neither bidder provided an improved proposal.
Oaktree Proposal Fell Below SkyCity’s Valuation
The NZ$0.70-per-share proposal from Oaktree was below SkyCity’s recent market price when the approach was made. The company’s board therefore considered the offer insufficient after reviewing SkyCity’s financial position, future prospects and strategic plans.
The second proposal carried an implied value of NZ$0.75 per share. SkyCity also declined that approach after considering its terms and conditions.
The proposed deals included restrictions that could have affected SkyCity’s ability to pursue its existing plans. One or both bidders asked the company to provide exclusivity, retain its current debt facilities and avoid entering binding agreements involving asset acquisitions or disposals.
Those conditions were relevant to SkyCity’s ongoing asset monetisation programme, which includes the sale of investment properties and the proposed disposal of the Grand Hotel. The board also considered the required due diligence period, financing arrangements and approval requirements when assessing the proposals.
Both bidders required at least eight weeks of due diligence and arrangements for debt financing. The proposed transactions also depended on agreement over the transaction structure, negotiations for binding documentation, unanimous board support, shareholder approval, regulatory clearances and internal approvals from the prospective buyers.
SkyCity Continues Asset and Operating Review
The disclosure follows SkyCity’s FY26 results, which showed a sharp decline in profitability. Net profit fell 37.6% to NZ$18.2 million, while EBITDA dropped 44.2% to NZ$120.5 million for the year ended June 30, 2026. Revenue increased 6.5% to NZ$878.9 million.
The company attributed pressure on earnings to weaker gaming revenue, costs connected with the rollout of carded play across its New Zealand properties and expenses associated with the New Zealand International Convention Centre.
SkyCity said it would continue pursuing the priorities outlined in its FY26 results.
Its asset monetisation programme is expected to generate gross proceeds of NZ$275 million to NZ$300 million. The programme includes the unconditional NZ$74.5 million sale of the 99 Albert Street and Victoria Street investment properties and a non-binding agreement for the sale of the Grand Hotel.
The company is also resetting its operating model. It expects NZ$30 million in realised benefits during FY27, with total benefits targeted at NZ$70 million in FY28.
As published in a press release (pdf), SkyCity is conducting a strategic review of its Adelaide Casino following a non-binding agreement with South Australia’s regulator, CBS. The agreement includes NZ$21 million in penalties related to governance and anti-money laundering compliance failures. Those penalties brought the total regulatory penalties imposed on the Adelaide Casino to NZ$88 million.
The group has also recently extended and consolidated two existing bank facilities into a single facility ahead of their scheduled maturities in July and September 2027.
Oaktree’s interest comes after previous attempts by the investment manager to acquire major Australian casino businesses. It previously bid for Crown Resorts and Star Entertainment Group. Blackstone ultimately acquired Crown, while Bally’s later took a controlling stake in Star alongside local partner Investment Holdings Pty Ltd.
Oaktree acquired electronic table games supplier Interblock in 2022.