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SkyCity's Morrison unaware of Echo Entertainment assets being for sale

Tuesday 28th February 2012

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SkyCity Entertainment Group, the casino and hotel operator, says it is unaware of the assets of Australian-based hospitality and gaming company, Echo Entertainment being up for sale and it focused on its own business.

In a statement to the NZX, the Auckland-based entertainment group said it will continue to focus on developing its New Zealand convention centre and the re-development of its Adelaide-based casino.

“Right now, we are totally focused on continuing to deliver shareholder value through our core businesses in New Zealand and Australia,” said Nigel Morrison, chief executive. “Sky City is not aware of any of Echo’s material assets being for sale.”

“Shareholders should be assured that Sky City would not consider any involvement in corporate activity or asset purchases, unless it represented compelling value to Sky City shareholders,” Morrison said.

Echo, which own Sydney’s only casino, released a statement to the Australian Stock Exchange last week that Crown, the rival casino operator controlled by billionaire James Packer, had doubled its stake in the company to 10 percent and sought regulatory approval to buy more.

Echo’s stock soared on the ASX and was recently quoted at A$4.32, valuing the company at about A$3 billion.

The shareholding increase will be converted into Echo shares to the value of $257 million, funded from Crown’s exiting cash holdings and undrawn debt facilities.

Sky City reported first-half profit jumped 17 percent to $78.8 million, last week. The record earnings were attributed to improved revenue from its flagship Auckland casino and hotel complex that benefitted from the Rugby World Cup and a turnaround in gaming revenue.

Shares in Sky City are currently up 2 percent trading at $3.70.

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