Betting's off Sky City as new PBL target

Publishing and Broadcasting Limited's withdrawal of a bid to build a casino in Singapore will allow it to expand its gaming empire in Asia, but New Zealand is unlikely to enter its sights, analysts said yesterday.

Sky City, New Zealand's largest casino operator with gaming properties on both sides of the Tasman, is not considered a PBL target, despite the extra capacity PBL likely has after deciding not to build the Singapore casino.

One analyst said PBL's focus would remain the "high-roller market" and the two casino commitments it has made in Macao which will keep its "hands full".

"When we've looked at potential acquirers of Sky City, PBL really hasn't been in the forefront and it really wasn't because they were potentially bidding in Singapore," said one New Zealand analyst.

"Our view has always been that PBL's view on gaming doesn't marry that well with the portfolio that Sky City has."

An Australian analyst ruled out Sky City as a potential acquisition, saying PBL has "bigger fish to fry" in Asia through its joint venture with Melco International Development, which is run by Lawrence Ho, son of Macao casino magnate Stanley Ho.

Furthermore, the acquisition by PBL - with its Star City casino in Sydney and three Jupiter casinos in Queensland - of Sky City or its Australian gaming rival Tabcorp would likely encounter opposition from the country's competition watchdog.

Analysts pegged Tabcorp as a better suitor for Sky City, followed by Unitab or Tattersalls, with PBL ranking as the last choice.

Sky City's high debt level - roughly $1.18 billion in June - might also make it a less than attractive acquisition or merger partner.

On Tuesday, PBL said it would pull out of bidding for the Singapore casino because it was too expensive. The resort was first expected to cost A$2 billion ($2.16 billion), but with rivals expected to pay twice that for a winning bid and with the Singapore Tourism Board setting land prices at A$986 million, PBL pulled out.

This marked James Packer's first move as head of the company after the death of his father Kerry last week. Tabcorp also pulled its Singapore bid last month due to higher than expected costs.