Friday, September 21, 2007

Sky City Casino Receives Takeover Bid

Casino and cinema operator Sky City Entertainment Group Ltd [SKC.NZX] has received a takeover bid from an as yet unnamed party.

SkyCity revealed the offer to the stock exchange this morning.

"SkyCity advises that it has received an indicative and confidential approach from a party expressing an interest in acquiring 100 per cent of the shares in the company," management have said. Tattersalls and Tabcorp, two Australian Casino operators are rumoured to be suitors.

"In its approach, the party indicates a potential cash offer price range subject to conditions which would represent a significant premium to SkyCity's current share price, if a transaction were to eventuate." The market today has already swallowed up a huge "premium" of around 25% so it probably anticipates an offer north of NZ$6 per share.

Shares in SkyCity surged NZ$1.19 to $5.52 this afternoon(12.07 PM ,NZ time) on over 13 million shares traded, valuing the company at almost $3 billion.

Management have stressed that the offer is still not a concrete one and they will inform shareholders as to what develops.

The offer would have to be significantly over the current share price of $5.52 for my good self to accept any offer as it is part of my long-term portfolio and has been for 5 years and I own a very large parcel. In fact I went on a buying spree this week and bought some more SKC, as well as a significant parcel of The Warehouse Group Ltd [WHS.NZX]

If you are a short-term investor you should probably run for the hills today but if you have bought this company as an investment then I wouldn't sell for less than 8 bucks.


Disc
: I own SKC shares in the Share Investor Portfolio


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Sky City Entertainment Group @ Share Investor


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Discuss SKC @ Share Investor Forum
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The Intelligent Investor: The Definitive Book on Value Investing. A    Book of Practical Counsel (Revised Edition)
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