SkyCity bids for all of cinema operator

Monday 19th April 2004

SkyCity Entertainment Group is issuing a takeover bid for the remaining shares and mandatory convertible notes (MCNs) which it does not currently hold in cinema exhibition company SkyCity Leisure Limited (Leisure).

SkyCity has held a controlling interest in the company - formerly Force Corporation - since March 2001 and has managed its day-to-day business operations since Leisure shareholders approved a Management Services Agreement at the company's 2002 annual meeting.

SkyCity's takeover bid for the remaining 25.6% of the company's equity offers minority shareholders $1.60 for Mandatory Convertible Notes (MCNs) and $0.82c for ordinary shares. It is expected the takeover offer will trigger the conversion of the MCNs into ordinary shares at a ratio of two shares for every MCN held.

SkyCity's managing director, Evan Davies, said the decision to bid for the remaining shares in SkyCity Leisure Limited presented benefits for both SkyCity and Leisure shareholders.

"This is a sensible commercial decision and will add value to our investment in Leisure. SkyCity already has a controlling interest in Leisure and full ownership will significantly reduce corporate and compliance costs, improve management decision-making efficiency, enhance Leisure's ability to respond to market growth opportunities for the cinema exhibition business in New Zealand, and will further strengthen SkyCity's overall entertainment positioning in New Zealand."

"Our offer has been made with a view to providing minority investors with the opportunity to sell their equity at a fair price, while at the same time streamlining the ownership and management structure of Leisure and allowing future opportunities for the business to be funded in an optimal manner.

Davies reiterated the importance of the cinema operations to SKYCITY's business operations.

"SkyCity is a broad based entertainment company and cinema operations are already a part of what we do. This investment clearly has value for our business and we remain committed to the future of this component of our operations."

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