The announcement last Friday by SKYCITY Entertainment Group that a bid to buy the business had been made for a ‘significant premium’ has led to much speculation over who the bidder could be. Tabcorp and Tattersall’s are understood not to be interested in the New Zealand gaming company and for the present it seems that US firm Providence Equity Partners is the favourite.

SKYCITY has neither confirmed nor denied the report and shares, which jumped over 24% on Friday, slipped 3.7% on Monday. Other potential bidders have been named as Australia’s PBL. Malaysia’s Genting Group, Dubai World and another US private equity firm, TPG-Newbridge. SKYCITY own casinos in Auckland, Hamilton, Adelaide and Darwin. It also holds 55% of a Queenstown casino and 41% of Christchurch Casino. Analysts call SKYCITY a high quality asset with a lot of potential.

Providence Equity Partners claims to be the world’s leading private equity firm focused on media, entertainment, communications and information investments. The firm was established in 1989 and now has approximately US$21 billion of equity capital under management. With headquarters in Providence, Rhode Island, the company has offices in New York, London, Hong Kong and New Delhi.

If the bid for SKYCITY Entertainment is from a private equity company and is successful, it will be yet another big gaming company being taken private. Providence Equity was part of an investor group which last September finalised a transaction that took Kerzner International private. The SKYCITY casinos could well be an attractive addition to the company’s portfolio. (E-09.25.07)

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