SkyCity takeover talk dismissed

Australian media suggest publisher John Fairfax Holdings could be eyeing Auckland-based casino operator Sky-City Entertainment as a takeover target but analysts are sceptical.

Fairfax emerged as an enigma in the Australian industry shake-up that followed this week's overhaul of media ownership restrictions.

The Sydney-based company - whose interests include the Sydney Morning Herald, Melbourne's Age and titles in New Zealand - was largely seen as a takeover target itself but comments from chairman Ron Walker have suggested it could look at making acquisitions.

A report in Rupert Murdoch's Australian newspaper yesterday said it was considering acquiring SkyCity and some Australian radio assets.

General speculation that SkyCity was a takeover prospect had been around for years but some believe its high levels of debt are a hurdle.

However, James Packer's Publishing and Broadcasting Ltd was seen as a more likely predator, as it already has interests in casinos.

Fairfax spokesman Bruce Wolpe would not comment on the report but said the company's strategic focus was "in media and online and the confluence between the two and further growth in the media sector".

Australian analysts said it was unlikely Fairfax would acquire the casino. The speculation did little for the Sky City shares, which closed down 7c at $5.18.

This week PBL said it would recapitalise some media assets, including ACP Magazines and the Nine Network, in a deal with private equity group CVC Asia Pacific and develop its gaming interests. It was also suggested the new PBL Media entity could seek to acquire some Fairfax assets.

Fairfax's assets could be broken up, analysts said, with the NZ division possibly going to a private equity buyer or being floated.