New Zealand’s SkyCity Entertainment Group will soon commence a formal sale process to seek proposals from potential buyers of its Australian casino resort, SkyCity Adelaide.
Providing an update on its strategic initiatives in a Wednesday morning filing, the company said this follows recent confirmation that it would conduct a strategic review of the Adelaide business, which has resulted in inquiries from “credible interested parties in that asset,” the company explained. The formal sale process aims to seek proposals from these as well as other parties.
SkyCity said that its main objective in exploring the Adelaide sale as well as other initiatives related to its ownership structure and asset base is to maximize value for all SkyCity shareholders.
In August, the company announced that it had received unsolicited approaches from two parties in relation to a potential acquisition of the group.
Although SkyCity rejected those proposals, it said this morning that it has continued to engage with both parties and intends to continue those discussions while also evaluating other opportunities that may enhance shareholder value.
“The Board continues to believe that the current share price and previously disclosed approaches do not fully reflect the underlying value of the SkyCity Group,” it said.
“SkyCity continues to make good progress on key strategic initiatives as outlined further below. The non-binding indicative proposals received earlier in the year have not resulted in improved proposals. Alongside the existing strategy, the Board intends to now also evaluate a range of potential opportunities under a structured process, including engagement with interested parties.”
SkyCity recently completed the sale of commercial properties in Auckland for a combined NZ$74.5 million (US$42 million) and is in advanced, exclusive negotiations for the sale of The Grand Hotel, with a binding agreement expected shortly, the company said.
It is also in the midst of a cost-out programme and group-wide reset of the operating model, targeting total benefits of NZ$30 million (US$17 million) in FY27 increasing to NZ$70 million (US$39.5 million) in FY28.
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