SkyCity chairman open to takeover talks but only if The Star takes the lead

skycity-casino-takeover-talkNew Zealand and Australian casino operator SkyCity Entertainment Group says it’s open to discussing a takeover by Aussie rival The Star Entertainment Group, but only if The Star takes the lead.

Last week, Australian media reported that SkyCity was mulling selling off its Darwin casino and could be open to a complete takeover by a rival such as The Star, which operates the casino of the same name in Sydney as well as properties in Queensland.

Following those reports, SkyCity publicly denied its Darwin property was on the block. On Monday, SkyCity chairman Brian Moller repeated that view but told investors that if The Star were to “come forward with a proposal then in the best interests of shareholders we will clearly consider it.”

However, Moller said there’d been no talks with The Star “nor any meeting held or arranged.” Moller also suggested anyone interested in any further details should “talk to and ask Star about this speculation rather than us.” A spokesman for The Star was similarly unhelpful, saying “there have been no discussions and we have no plans for any discussions.”

At any rate, Moller insisted that SkyCity wouldn’t initiate any takeover discussions, as the company is currently preoccupied with a number of major distractions, including the hunt for a new CEO after Nigel Morrison announced last week that he’d be stepping down as of April 29.

Moller noted that Morrison’s exit meant the company “clearly have to bed in the new team, we have got a search to undertake globally and we’ve got some very significant programs under way,” the latter category including the A$300m expansion of its Adelaide property, all of which left little time for working out the nuts and bolts of an ownership transfer.

The chief executive transition also featured large in Monday’s investor call, as Moller saw the need to explain that there had been plenty of “robust debates” between Morrison and SkyCity’s board but none of these had produced a rift that precipitated the CEO’s exit.

Morrison’s desire to leave may have come as a surprise to investors but Moller insisted that the CEO had expressed his intentions to the board six months ago. Morrison was required to give the board six months notice, but now that the announcement had been made, Moller said it was not Morrison’s “style to hang around.”

Moller said “some interesting parties” had been in contact with SkyCity regarding Morrison’s soon to be vacant position. Moller hinted that some of these candidates may be looking to transition out of the Macau market due to Beijing’s ongoing heavy-handed approach to the casino business.