Sky City sale could be off

News yesterday that Sky City Entertainment Group Ltd [SKC.NZX], which has been in play for the last 3 months, has probably only got one interested party left that wants to buy the company is music to my ears.

Reportedly there had been "several" interested parties with one, United States- based private equity TPG Newbridge Capital with Apollo Management, doing due diligence and one other "serious" bidder.

As I have ranted on before Sky City is worth a whole lot more than the rumored $NZ5.50-6 per share that has been talked about. It is a monopoly in all the markets it operates in and has some seriously good assets that have been mismanaged to the point where another party thinks it can take the company for a bargain price.

One reason cited for difficulties with parties looking over the company making offers was the current climate of fear over raising debt and the cost of that borrowing.

Shareholders will be expected to hear a definite outcome at the time of the board meeting on December 5 and 6, according to Sky City Management.

I'm still a little unclear as to when shareholders will know about the Cinema division sale because the deadline has changed so many times but as I have mentioned before the sale of this asset should return a special dividend back to owners.

The only questions that are left to answer are who the new CEO is going to be and whether he or she will have a clear direction as to where the company is going and whether he can inspire the motley crew that are currently there with their feet under the boardroom table to follow his direction.

The stock was punished on the news today with the share price down 30c to $4.90 on big volume of 25 million dollars.

Disc: I own SKC shares in the Share Investor Portfolio


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