SkyCity Board Rejects Two May Takeover Proposals from Oaktree and Iris Capital Citing Undervaluation and Problematic Conditions

SkyCity Entertainment Group disclosed that its board rejected two takeover approaches received in May, including one from a fund managed by Oaktree Capital Management. The board concluded that the proposals did not adequately reflect the company’s underlying value and contained problematic conditions.

“The SkyCity Board carefully considered these indicative proposals, with input from management and advisers,” the company explained. “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 approaches valued the New Zealand casino operator at between NZ$772 million and NZ$827 million, equivalent to $460.7 million to $493 million. Oaktree’s proposal offered NZ$0.70 ($0.42) in cash for each SkyCity share. A separate bid implied NZ$0.75 ($0.45) per share in cash from Sam Arnaout’s Iris Capital, owner of Casino Canberra and Alice Springs’ Lasseters Hotel Casino, as confirmed by The Australian Financial Review.

Bid Conditions and SkyCity Response

Both proposals carried multiple conditions, including at least eight weeks of due diligence, arrangement of debt financing, agreement on transaction structure, negotiation of binding documentation, unanimous board support, shareholder approval, regulatory approvals, and internal acquirer approvals. One or both parties also requested that SkyCity refrain from binding agreements to acquire or dispose of assets, including under its asset monetization program, and sought exclusivity plus retention of existing debt facilities.

According to reporting by Yogonet International, SkyCity indicated it was prepared to engage further and provide due diligence if either party submitted a revised proposal addressing the board’s concerns. No improved proposal has been received.

Financial Measures and Performance Context

The disclosure comes as SkyCity undertakes measures to strengthen its financial position. Last month the company extended and consolidated two tranches of existing bank facilities into a single facility ahead of maturities in July and September 2027. It has confirmed the sale of an office building and investment properties near SkyCity Auckland and entered a non-binding heads of agreement for the sale of The Grand Hotel at the property.

Last week SkyCity reported EBITDA of NZ$120.5 million ($71.92 million) for the year ended June 30, 2026, down 44.2% from a year earlier. Net profit after tax fell 37.6% to NZ$18.2 million ($10.8 million). Results were affected by weaker visitation, mandatory carded play, and higher costs tied to the New Zealand International Convention Centre opening. The company has also begun a strategic review of its SkyCity Adelaide resort.

Reporting: Yogonet International

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