SkyCity Entertainment Group has confirmed it rejected two unsolicited acquisition proposals back in May, including a cash offer from an Oaktree Capital Management special situations fund.
The Oaktree approach was pitched at NZ$0.70 per share, while a second unnamed party submitted a separate proposal valuing shares at NZ$0.75 each.
Based on SkyCity’s 1.103 billion ordinary shares, the Oaktree proposal placed the company’s equity value at approximately NZ$772 million.
The second bid implied a valuation of roughly NZ$827 million, though both approaches remained confidential and non-binding throughout.
Each proposal came with significant conditions attached, including at least eight weeks of due diligence, debt financing arrangements, board backing, shareholder approval, and various regulatory sign-offs.
One or both prospective buyers also sought exclusivity and asked SkyCity to retain its existing debt facilities while refraining from binding asset acquisitions or disposals.
That restriction notably extended to properties already included in the group’s ongoing asset monetisation programme, complicating matters further for the board.
SkyCity’s board concluded that the indicative prices did not adequately reflect the company’s underlying value and judged the attached conditions to be problematic.
The company stated it would have considered providing due diligence access had either bidder returned with a revised proposal addressing those objections, but neither party followed through.
The rejected bids surfaced during a broader restructuring period, with SkyCity targeting NZ$30 million of realised cost benefits in fiscal 2027 and NZ$70 million in fiscal 2028.
In June, SkyCity Adelaide reached non-binding terms with South Australia’s gambling regulator for an A$21 million fine alongside compliance measures following a suitability review.
SkyCity’s fiscal 2026 results painted a challenging picture, with reported net profit falling 37.6% to NZ$18.2 million and underlying EBITDA dropping 22.3% to NZ$181.6 million.
Gaming revenue declined 5.9% across the period, affected by carded play implementation, weaker premium play, and softer fourth-quarter visitation and consumer spending.
Net debt stood at NZ$590.7 million as of 30 June, with the bank-covenant net-debt-to-EBITDA ratio sitting at 3.1 times and no dividend declared for shareholders.
SkyCity expects to generate gross proceeds of between NZ$275 million and NZ$300 million from asset sales, including NZ$74.5 million from the unconditional sale of two Auckland investment properties.
Non-binding sale terms are also in place for the Grand Hotel, with the company targeting net debt below twice EBITDA in fiscal 2027 before accounting for any online casino licence payment.
Adelaide continues to weigh heavily on the group, with its underlying EBITDA falling 26.7% to NZ$22.8 million and SkyCity recording a NZ$52.2 million impairment against the operation.
A strategic review of the Adelaide business is set to begin in the first half of fiscal 2027 as the company works to stabilise its financial position.
Any renewed acquisition approach from Oaktree or another party would need to meaningfully address both the valuation shortfall and the structural conditions that ended the first two bids.
SkyCity’s response makes clear that it intends to press ahead with its asset sales programme, cost reset initiative, and the ongoing Adelaide regulatory process regardless of any external interest.
