SkyCity Entertainment Group turned down two unsolicited takeover proposals from Oaktree Capital and another party, citing undervaluation and onerous conditions. The company remains focused on its asset sales and operational reset.
- Unsolicited takeover bids at NZ$0.70 and NZ$0.75 per share
- Board unanimously rejected proposals as undervaluing SkyCity
- Proposals included exclusivity and asset transaction restrictions
- Asset monetisation programme targeting $275-300m proceeds
- Operational reset aiming for $70m benefits by FY28
Takeover Bids Fell Short of Board Expectations
SkyCity Entertainment Group (NZX:SKC, ASX:SKC) has publicly dismissed two takeover proposals received in May 2026, including one from Oaktree Capital Management’s special situations fund. The indicative offers valued SkyCity shares at NZ$0.70 and NZ$0.75 in cash, respectively, but both were conditional and nonbinding. After thorough consideration, the SkyCity board unanimously concluded these bids failed to reflect the company's intrinsic worth and contained problematic conditions.
Stringent Conditions and Restrictions Raised Concerns
Beyond valuation, the proposals demanded exclusivity from SkyCity, restrictions on asset transactions, and maintenance of existing debt facilities. This included halting any binding agreements related to the company’s ongoing asset monetisation programme, which targets gross proceeds between $275 million and $300 million through sales such as the unconditional disposal of the 99 Albert Street and Victoria Street properties for $74.5 million, and a non-binding agreement for The Grand Hotel. The board found these conditions overly restrictive, limiting strategic flexibility during a critical reset phase.
Strategic Priorities Remain on Track Amid Takeover Interest
SkyCity is pressing ahead with a group-wide operating model reset aimed at delivering $30 million in realised benefits in FY27, scaling to $70 million by FY28. The company is also advancing a strategic review of its Adelaide operations following a recent non-binding agreement with South Australian regulators. These initiatives come on the back of a challenging FY26, which saw a 22% decline in underlying EBITDA, partly due to regulatory costs and the rollout of mandatory carded play across New Zealand casinos.
Asset sales are a key lever for strengthening the balance sheet and funding operational improvements. The unconditional sale of prime commercial assets is expected to settle shortly, while the sale of The Grand Hotel remains subject to due diligence and regulatory approvals. These moves align with SkyCity's broader strategy to enhance financial flexibility and shareholder value.
Board Open to Revised Proposals but None Materialised
Though SkyCity rejected the initial bids, it signalled willingness to engage further if revised proposals addressed valuation and structural concerns. Neither Oaktree nor the other interested party submitted improved offers. The board’s stance underscores its confidence in the company’s standalone value and strategic path, despite external interest.
Bottom Line?
SkyCity’s rejection of conditional bids highlights a firm board view on valuation and strategic control, setting a high bar for any future takeover attempts.
Questions in the middle?
- Will Oaktree or other parties return with improved offers reflecting SkyCity’s strategic progress?
- How will ongoing asset sales and cost savings influence SkyCity’s valuation in the near term?
- What impact will regulatory developments in Adelaide have on SkyCity’s operational reset and investor sentiment?