According to local media reports, SkyCity Entertainment Group has been looking for a buyer for its Darwin casino business situated in the Northern Territory of Australia since October 2017.
Unfortunately for the company, it has still not managed to find a buyer for the property, as the price of AU$200 million has been considered a bit too high for most operators which could be interested in such an acquisition.
In February 2017, the operator explained that there was no urgency for the sale to be carried out, especially considering the fact that the casino property remained profitable.
SkyCity, which is currently the only casino operator in New Zealand, is trying to sell the assets in order to fund some of its investments. The company has appointed Goldman Sachs investment bank to evaluate a number of strategic options for the business, including a full sale of the property. All funds that could be generated from a potential deal are planned to be used to repay SkyCity’s short-term debt, as well as to be invested in various initiatives looking for further growth.
As reported by The Australian which cited undisclosed sources, it would be highly unlikely for SkyCity to manage to find another casino company to acquire the business. According to media reports, it is much more likely for the company to find a private consortium which already has a business based in the region, so that it could look for an opportunity to boost its existing assets.
Wealthy Families Seen as Possible Buyers of the Casino
The Darwin Casino and hotel business was acquired by SkyCity from MGM Mirage back in 2004. The acquisition price at the time amounted to AU$195 million, including all costs and taxes and came as part of the SkyCity’s strategy to expand in Australia after purchasing another casino property in Adelaide.
For the time being, the local casino operator The Star Entertainment Group is not interested in purchasing the Darwin Casino. The same applies to the Genting Group based in Malaysia. According to media reports, the potential buyers of the Darwin Casino included in the Goldman Sachs’ list include the Halikos family, the Paspaley family, the Coombes family, as well as John “Foxy” Robinson, a wealthy local entrepreneur. The Australian further reported that there were information memorandums for the casino assets were currently circulating in the market.
At the time of SkyCity released its report for the latest fiscal year, the Darwin business investment was written down by the company by AU$95 million to AU$195 million. This decision was made by the operator after it reported that the business’ performance had suffered from the strong competition of the gaming machines offered in local clubs and pubs over the past couple of years.
Currently, the Darwin Casino has 600 electronic gaming machines and 43 gaming tables, while the hotel offers 152 rooms.