By Nicholas Bryant
Friday 25th August 2000
|Text too small?|
The value of Canbet's shares has plunged 45% from a high of 32Ac last month to 17.5Ac on Wednesday since news broke of possible relaxing of online gaming laws in the US. Canbet is principally owned by entrepreneur Eric Watson and 70% of its business emanates from the US.
Market analysts earlier warned more liberal gaming laws would lead to a proliferation of online gaming companies in the US. They argued this would substantially reduce Canbet's business.
The deal with Canbet sees Sky City initially paying $A5 million before the end of August for 16.67 million new shares at 30Ac each. This equates to a 6.8% stake and comes with free options on a 1:1 basis at a strike price of 20Ac. The options can be exercised anytime before March 31, 2002.
Sky City will take up the remainder of its shareholding in October when the first payment is made. A second payment is due 12 months later. Sky City will be issued additional options on the same terms as the August placement, boosting its shareholding to 33%.
In announcing Sky City's annual results last week, managing director Evan Davies declined to comment on the specifics of the Canbet investment but he indicated a greater interest in online gaming ventures was a strong possibility.
Market analyst Frank Fernandez said it was unlikely Sky City would be realising its Canbet options "in a hurry" with the strike price now sitting higher than the share price.
No comments yet
NZ dollar falls against Aussie after jobs data there
Sky CEO put on notice by chunky vote against salary share scheme
Unions gearing up to oppose 'market tests' on Fair Pay Agreements
Mandatory farm plans scorned as 'tick box' exercises
Kiwi dollar firms on weak US retail data, capped by rate-cut expectations
17th October 2019 Morning Report
SkyCity hoses down union claims over potential job losses
OPINION: Fair Payment Agreements and 'swallowing vomit' - the lot of the CTU
MARKET CLOSE: NZ shares gain; Restaurant Brands climbs on upbeat outlook
NZ dollar stalls after Bascand's rate cut comments