Darwin casino: Genting Group tipped to beat local bidder for Sky City casino

The Darwin casino was purchased by Sky City in 2004 for $195m and has 600 electronic gaming machines, 40 tables and 152 hotel rooms

Genting Group out of Malaysia or an Australian property developer are being tipped as the most likely buyer of Sky City Entertainment’s Darwin Casino, as investment bank Goldman Sachs continues to weigh options for the venue on behalf of its listed owners.

The casino, based in the Northern Territory capital, has been unofficially on the market for some time, and Sky City Entertainment said yesterday during its investor day presentations in Auckland that Goldman Sachs would test interest from selected parties, and that if a sale could be concluded at the right price with the right buyer, proceeds would be used to repay debt and fund short-term strategic growth initiatives.

Market talk suggests the most likely acquirer would be Genting Group, and should it not acquire the casino, the next move could involve selling the site to a property developer and retaining a management agreement to operate the casino.

Genting has a connection with Asia and access to the VIP gamblers, which is key to the success of the casino.

The understanding is that Sky City’s hope is to gain a price of more than $200 million for the casino, and many believe the entertainment company has failed to attract a buyer because it is asking too much.

Sky City’s rivals are not thought to be around the situation.

Crown has indicated it wants to get back to its core operations while rival Star is also not thought to be an acquirer.

web copy of data room graphic

The perennial theory has always been that a merger between SkyCity and Star Entertainment Group should happen to create a $7 billion entity, but is not thought to be happening any time soon.

Previously, Credit Suisse-First New Zealand Capital has been working for SkyCity Entertainment, while Star had Macquarie Capital and Flagstaff in its corner.

Shareholders have lobbied for a merger deal in the past.

The Darwin casino was purchased by Sky City in 2004 for $195m and has 600 electronic gaming machines, 40 tables and 152 hotel rooms.

It generates about 12 per cent of Sky City’s revenue and 8 per cent of its earnings.