The Star Entertainment Group is understood to be working out the options for a potential merger with New Zealand’s Skycity Entertainment Group, according to sources quoted by The Australian.
"It is understood that The Star Entertainment Group's chief executive, Matt Bekier, has expressed his willingness to embark on a merger with the rival casino operator across the Tasman, subject to price," reported the news outlet.
It is understood the Australian casino operator is working out the options with investment bank Macquarie Capital and advisory firm Flagstaff. The merger of the two groups could create a A$7 billion casino operator.
However, talks of a possible takeover of the SkyCity Entertainment Group has raised concerns from New Zealand’s investors.
Shane Solly, a portfolio manager of Harbour Asset Management in Auckland expressed concern over the news.
"New Zealand investors are in no hurry to see another New Zealand company taken over and removed from the New Zealand market. We want to support well-run businesses in New Zealand. We would like to see Sky City improve its underlying performance. We have got a market with a shortage of good businesses and we want more good businesses to invest into," Solly told the New Zealand Herald.
In April, Chris Moller, chairman of the New Zealand-listed operator had said the company would consider a proposal from The Star if offered.
The recent speculation has caused some SkyCity investors, believed to be Perpetual, Masco Capital and Investors Mutual, to threaten to call an extraordinary meeting to vote on the departure of chairman Chris Moller, whom they say is “ refusing to properly engage with Star Entertainment chairman John O’Neill about the prospect of a merger between the two companies.
Sources said some members of The Star’s board were lobbying for a merger to occur, but the company’s Malaysian shareholder Genting, which controls 6.6 per cent of the company according to Bloomberg, is reluctant for a deal to proceed.
Asia Gaming Brief is a news and intelligence service providing up to date market information for worldwide executives on relevant gaming issues in Asia.
ASIA GAMING BRIEF
PO Box 1139, Macau SAR
Tel: +853 2871 7267
Fax: +853 2871 7264