SkyCity Opens Its Books to Bidders for the Whole Group After Capping Its Online Bet at Two Licences

SkyCity Entertainment Group will give interested parties due diligence information on the entire business, though its chair told shareholders that no new or improved proposal has arrived since the two it rejected. The same morning its chief executive said it bid for two online casino licences rather than three to stay within its return targets.

• SkyCity chair Julian Cook told the annual meeting in Auckland on 21 October that the board will seek proposals for the whole business through a structured process, giving interested parties some due diligence information, with UBS and Chapman Tripp as advisers
• Cook said no improved proposal, and no whole-business proposal from anyone new, has been received since the board rejected approaches at NZ$0.70 and NZ$0.75 a share as opportunistic, although it remains aware of continued interest
• Chief executive Jason Walbridge said bidding for two online casino licences rather than the maximum three was a deliberate capital allocation decision, after the auction cleared at NZ$15 million a licence
• The shares closed unchanged at NZ$0.67, valuing SkyCity at about NZ$739 million (approximately $420 million), below both rejected proposals
• SkyCity expects FY27 capital expenditure of around NZ$120 million including the NZ$30 million licence bill, and says dividends should resume in FY28

SkyCity Moves From Fielding Approaches to Running a Process

SkyCity Entertainment Group, the casino operator listed on the NZX and ASX, released its chair's and chief executive's addresses before its annual meeting on Wednesday. Chair Julian Cook said both proposals received earlier in the year were "unsolicited, non-binding highly conditional and indicative", and that the board had concluded unanimously that both "were opportunistic and undervalued the business".

"We have received no further improved proposals since then nor non-binding whole of business proposal from anyone new," Cook said. "However, the Board remains aware of continued interest in the whole business." The structured process "will involve engaging with interested parties and giving them access to some due diligence information", with UBS and Chapman Tripp as investment banking and legal advisers. The board "remains confident that our current strategy is robust", he said, but would consider carefully any proposal that delivers greater value; the process "will take some time to progress" and may produce no transaction or offer. A new Structured Review sub-committee of the board will guide it. No indicative price or timetable was given.

SkyCity first flagged the process on 30 September, when it said it would run a UBS-led sale of SkyCity Adelaide and engage with parties interested in the group. The May proposals, disclosed on 25 August, came from a special situations fund managed by Oaktree Capital Management at NZ$0.70 cash a share and from an unnamed party at an implied NZ$0.75. Australian media reports at the time named Blackstone, Bally's and Apollo alongside Oaktree as possible suitors, Inside Asian Gaming reported; SkyCity has named only Oaktree.

The shares closed at NZ$0.67, unchanged on the day, according to Yahoo Finance data. On 1,103,055,047 shares that is about NZ$739 million, by our calculation, 4.5% below the Oaktree price and 11.9% below the other. The stock is up 44% from its 2026 closing low of NZ$0.465 on 11 June but 25.6% below its end-2025 close of NZ$0.90. Spheria Asset Management ceased to be a substantial holder on 16 October, cutting its stake to 4.714%, according to a filing published on 20 October.

Two Licences, Not Three

Walbridge said SkyCity is preparing applications for the two licences it won the right to apply for last week at NZ$15 million each excluding GST (approximately $8.5 million). "The auction settled at a price within the scenarios we modelled, and we are confident we can achieve the appropriate return on the capital invested," he said, adding that cutting from three licences to two kept SkyCity "within our risk-adjusted, return on capital targets".

If licensed, SkyCity would hold two of the market's 15 brands. Walbridge cited a brand New Zealanders know, the ability to advertise online for the first time and its grasp of host responsibility and anti-money laundering rules, but said advertising levels would be watched closely when the market goes live in the second half of FY27, which ends in June 2027. Cook put the regulated market at an estimated more than NZ$1 billion a year (approximately $569 million).

SkyCity reiterated its earnings outlook but gave no formal guidance, citing the undetermined timing of online entry. Asset sales, including the NZ$221 million Grand Hotel deal, should yield close to NZ$300 million by December, which Walbridge said should bring net debt to around 2.0 times underlying EBITDA by the end of FY27, including the licence cost. In August the target was below 2.0 times, stated before the licence payment. One-off restructuring charges of NZ$17 million to NZ$22 million are expected.

The Regulatory Record a Buyer Inherits

SkyCity ended FY26 with net debt of NZ$591 million (approximately $336 million) against underlying EBITDA of NZ$181.6 million. In June 2024 the Federal Court of Australia ordered SkyCity Adelaide to pay a A$67 million (approximately $47 million) penalty in proceedings brought by AUSTRAC, which said its failures let high-risk customers move millions of dollars through the casino. In September 2024 the Auckland High Court ordered SkyCity Casino Management to pay an agreed NZ$4.16 million (approximately $2.4 million) anti-money laundering penalty, according to the Department of Internal Affairs (DIA). Two months earlier, settling a DIA bid to suspend its licence over 23 undetected incidents of continuous play by one customer, SkyCity agreed to shut the Auckland gambling floor for five days. Adelaide is settling a separate South Australian review for a A$21 million fine.

The Board Has Not Found a Better Price, So It Is Building a Market for One

The most telling line in Cook's address is that nothing new has arrived, three weeks after SkyCity said it would engage with suitors. Opening a data room is how a board tests whether interest becomes a price, and a structured process gives a defensible answer either way: a better offer, or evidence that the standalone plan is worth more. Unchanged shares, still below both rejected prices, suggest investors see a floor-setting exercise rather than a sale in waiting.

Online Discipline Is Also a Message to Bidders

Two licences cap the upfront spend at NZ$30 million and let management argue the online business will earn its cost of capital. A buyer would be acquiring a land-based franchise with an online option, not a heavily committed online bet, and a leverage target that now includes the licence bill is easier to underwrite. The risk runs the other way too: if 15 brands compete hard on marketing, two licences may suit SkyCity's balance sheet but be too small to make online the thing a bidder pays for.

The Court Penalties Are Paid, the Compliance Regime Is Not

AUSTRAC, the DIA settlement and the Auckland closure are behind SkyCity. What a buyer inherits is the regime they produced: Adelaide's remediation programme is not due for formal completion until early FY28, and the May proposals were themselves conditional on regulatory approvals. Selling Adelaide on its own track means a bid for the group need not price an unresolved Australian review.

SkyCity has turned interest without offers into a process with advisers, a data room and a board committee, and says it may end with nothing. Until someone pays more than NZ$0.75 a share, the plan the board calls robust remains the base case.