SkyCity Rejects Two Takeover Bids Worth Up to NZ$827 Million

Kyle Kevin

iGaming Writer

Fact Checked

SkyCity rejected two takeover bids worth up to NZ$827 million. The board called the offers too low and the conditions too onerous. Neither suitor came back.

SkyCity Entertainment Group rejected two takeover bids worth up to NZ$827 million ($493 million). The New Zealand casino operator disclosed the approaches on August 25 in response to media speculation about Oaktree Capital interest. Both proposals arrived in May 2026. Oaktree’s special situations fund offered NZ$0.70 cash per share. A second, unidentified party offered NZ$0.75. Based on 1.10 billion outstanding shares, the bids valued SkyCity’s equity at NZ$772.1 million and NZ$827.3 million respectively. The board unanimously rejected both. It determined the prices did not reflect underlying value and the attached conditions were problematic. SkyCity told both parties it would consider further engagement, including due diligence access, if they submitted improved proposals. Neither did. The company is now focused on its own turnaround. It is executing an asset monetisation programme expected to generate NZ$275–300 million in gross proceeds. It is also conducting a strategic review of SkyCity Adelaide that could lead to a sale. The rejection comes after a brutal FY2026. EBITDA fell 44.2% to NZ$120.5 million. Net profit after tax dropped 37.6% to NZ$18.2 million. The results reflected weaker visitation, mandatory carded play rollout and higher costs from the New Zealand International Convention Centre opening.

The Two Takeover Proposals SkyCity Rejected

The proposals landed in May 2026, confidential and unsolicited. Oaktree Capital Management’s special situations fund led with NZ$0.70 cash per share. The second bidder, whose identity SkyCity has not disclosed, offered NZ$0.75. Both were conditional, non-binding and indicative. The Oaktree bid valued SkyCity at roughly NZ$772 million. The unnamed party’s offer implied NZ$827 million. The gap between the two offers — NZ$0.05 per share — suggests different views on SkyCity’s recovery trajectory or asset values. Oaktree is a known quantity in casino M&A. The Los Angeles-based firm manages approximately $183 billion in assets. It has previously pursued Australia’s two dominant casino operators, Crown Resorts and Star Entertainment Group. Blackstone ultimately acquired Crown. Bally’s Corp took control of Star alongside local partner Investment Holdings. Oaktree’s 2022 acquisition of Interblock, a luxury electronic table games supplier, gave it gaming industry exposure without operating risk. The second bidder remains a mystery. Australian media had speculated that Blackstone, Bally’s and Apollo Capital Management — owners of The Venetian Las Vegas — were among potential suitors. None have confirmed interest. SkyCity’s disclosure was triggered by media reports naming Oaktree specifically. The company chose to confirm the May approaches rather than let speculation run unchecked. That transparency is unusual for a company in takeover talks. It also signals confidence that the board made the right call.

Why the Board Said No

The SkyCity board rejected both proposals unanimously. It cited two reasons. First, the prices did not adequately reflect the company’s underlying value. Second, the conditions were problematic. The conditions were extensive. Both proposals required at least eight weeks of due diligence. Both needed debt financing arranged. Both were conditional on transaction structure agreement, binding documentation, unanimous board support, shareholder approval, regulatory approvals and acquirer internal approvals. One or both bidders also demanded exclusivity. They wanted SkyCity to halt its asset monetisation programme. They wanted the company to retain existing debt facilities rather than refinance or restructure. Those restrictions would have tied SkyCity’s hands at a critical moment. The asset monetisation programme is central to the company’s turnaround strategy. It includes the unconditional NZ$74.5 million sale of two Auckland investment properties and a non-binding agreement to sell the Grand Hotel. Halting those sales would have undermined management’s credibility and delayed balance sheet repair. The board also noted that neither party submitted a revised, improved proposal after being told what was wrong. SkyCity explicitly invited both to come back with better terms and due diligence access. Neither did. That lack of follow-through suggests the bidders were testing the waters rather than committed to a deal. The board’s rejection was not a negotiating tactic. It was a definitive no. The share price reaction will test whether investors agree with the board’s valuation assessment. SkyCity shares had already surged 7.4% on Monday amid takeover speculation. The August 25 disclosure may cool that momentum if the market concludes that no deal is imminent.

Oaktree’s Casino Track Record

Oaktree Capital Management is no stranger to casino M&A. The firm, founded in 1995 by Howard Marks and Bruce Karsh, manages approximately $183 billion across credit, private equity and real assets strategies. Its special situations fund targets distressed or undervalued companies with turnaround potential. Oaktree previously bid for Crown Resorts, Australia’s largest casino operator. Blackstone ultimately won that auction, taking Crown private in 2022 for roughly AU$8.9 billion. Oaktree also pursued Star Entertainment Group, the operator of casinos in Sydney, Brisbane and the Gold Coast. Bally’s Corp and local partner Investment Holdings acquired a controlling stake in Star in 2025. Oaktree’s consolation prize was Interblock, a luxury electronic table games supplier it acquired in 2022. That deal gave Oaktree exposure to gaming technology without the operational complexity of running casinos. The SkyCity approach represents Oaktree’s third attempt at a casino operating company in the Australia-Pacific region. The NZ$0.70 per share offer implies a valuation below SkyCity’s net asset value, suggesting Oaktree saw the company as a distressed asset play. SkyCity’s board disagreed. The rejection may not end Oaktree’s interest. Special situations funds are patient. They wait for management to stumble, for the share price to fall further, for debt covenants to tighten. SkyCity’s FY2026 results show a company under pressure. EBITDA down 44.2%. Net profit down 37.6%. Mandatory carded play reducing domestic casino volumes. The New Zealand International Convention Centre adding cost without immediate revenue. Oaktree may simply be waiting for a better entry point. AGBrief tracks M&A activity across Asia-Pacific gaming markets.

SkyCity’s Asset Sales and Strategic Reset

SkyCity is not waiting for a white knight. It has its own plan. The asset monetisation programme targets NZ$275–300 million in gross proceeds. The first tranche is complete. SkyCity sold two Auckland investment properties at 99 Albert Street and Victoria Street for NZ$74.5 million. That deal is unconditional. The second tranche is in progress. The company has signed non-binding heads of agreement for the sale of the Grand Hotel, the luxury property attached to SkyCity Auckland. The third element is under review. SkyCity is conducting a strategic review of SkyCity Adelaide, its Australian resort. That review follows a non-binding agreement reached with the South Australian regulator, Consumer and Business Services. The Adelaide property has been a drag on the group. Regulatory scrutiny, compliance costs and competitive pressure have eroded profitability. A sale would simplify the portfolio and raise cash. Beyond asset sales, SkyCity is executing a group-wide operating model reset. The company targets NZ$30 million in realised benefits in FY2027, growing to NZ$70 million in FY2028. Those savings must offset the revenue headwinds from mandatory carded play, which requires all domestic casino patrons to use a registered card for play and imposes mandatory pre-commitment limits on time and spend. The carded play system is designed to reduce problem gambling. It also reduces casual play and increases friction for regular customers. SkyCity’s FY2026 results showed the impact. Weaker visitation across domestic casinos. Higher costs from the NZICC opening. Lower EBITDA despite revenue that fell only 22%. The company has extended and consolidated two tranches of bank facilities ahead of their July and September 2027 maturities. That refinancing buys time. It does not solve the underlying challenge of rebuilding earnings in a market where regulation is tightening and competition is intensifying. SkyCity rejected NZ$827 million because it believes the company is worth more. The market will now decide whether the board was right or whether it missed its best exit.

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