The SKYCITY update published earlier this week received a positive reaction from the stock market. It also raised questions about the future of Christchurch Casino. SKYCITY Entertainment owns a 40.5% stake in the casino, having paid NZ$93.75 million for it in April 2004. It was reported that Barry Thomas, Chairman of Skyline Enterprises, which also holds a 40.5% stake in the casino, tried to stop SKYCITY acquiring its stake from the British company Aspinall and refused to cooperate over due diligence.

With the news that SKYCITY is now considering selling its share, the millionaire businessman would not comment on whether he was interested in purchasing. He did say that he thought Christchurch Casino revenue would be reasonable despite the government ban on smoking and moratorium on casino expansion. The casino, opened in 1994 was the first in New Zealand and has 500 gaming machines and table games including American roulette, blackjack and poker.

The announcement by SKYCITY that it is reviewing its businesses for potential asset sales and curtailing acquisitions has caused analysts to remark that the company will become more attractive as a takeover target. Skyline is thought to become a contender for the 40.5% interest in Christchurch Casino if it is put up for sale, but private equity firms are likely to want a bigger slice of the operation. Since the announcement investors have already pushed SKYCITY shares higher. (E-05.24.07)

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