SkyCity puts Adelaide casino up for sale
SkyCity Entertainment Group is formally putting its Adelaide casino on the market after receiving approaches from potential buyers.
The New Zealand-based casino operator says a strategic review of SkyCity Adelaide has already resulted in inquiries from what it describes as “credible interested parties”.
It will now move to a structured sale process seeking proposals from those parties and other potential buyers.
Investment bank UBS has been appointed to lead the process, but the decision represents a significant step beyond the strategic review SkyCity announced in August.
SkyCity Adelaide is the only casino in South Australia, giving any potential transaction considerably greater regulatory significance than an ordinary hotel or entertainment-property sale.
SkyCity has not identified the interested buyers and there is no guarantee a transaction will ultimately take place, but it comes after the Adelaide business endured a difficult regulatory period.
SkyCity said it is separately well advanced in negotiations with South Australia’s Consumer and Business Services over a binding agreement intended to resolve outstanding regulatory matters stemming from an earlier independent review of the casino. Those issues are likely to make regulatory approval an important part of any eventual transaction.
The casino itself forms part of the wider Adelaide entertainment precinct and underwent a major expansion completed in 2020.
SkyCity’s decision to consider selling it forms part of a broader attempt to simplify the company and strengthen its balance sheet.
The group is targeting between NZ$275 million and NZ$300 million from its wider asset monetisation program before the end of 2026.
It has already generated NZ$74.5 million through the sale of commercial properties and is in advanced negotiations over the sale of The Grand Hotel.
The company also continues to operate casinos in Auckland, Hamilton and Queenstown.
Analysts at Forsyth Barr have reportedly valued the Adelaide casino at approximately NZ$180 million to NZ$200 million, although SkyCity has not placed its own public sale price on the property.
SkyCity has also received two unsolicited approaches concerning a takeover of the wider company, with its board rejected the proposed terms, saying they did not adequately reflect SkyCity’s underlying value.
For now, the Adelaide process is separate. But if a suitable buyer emerges, SkyCity could exit Australian casino operations entirely and become much more heavily concentrated on its New Zealand businesses.
