Sky City confirms Taverner interest

Sky City Entertainment has confirmed it is considering making a bid for the Taverner Hotel Group, an Australian hotel and gaming business.

Taverner operates in Victoria, South Australia and New South Wales.

Bids are due in by October 7. Sky City said it did not expect Taverner to make a decision until several weeks after the close of bidding.

Australian media said other parties interested in buying Taverner were giant United States private equity operator Carlyle Group, a Deutsche Bank private equity fund and Woolworths.

The asking price is reported to be over A$350 million ($386 million).

The Taverner Group is currently jointly owned by two private equity groups: Catalyst Investment Managers with a 55 per cent stake, and Advent Management with a 27 per cent stake. The balance is held by smaller investors.

Speculation was fuelled that Sky City was eyeing Taverner when it opened an issuance of up to 1.5 million adjustable-coupon, exchangeable securities (ACES) at A$100 ($112.32) last week.

In the accompanying prospectus Sky said it was looking at a potential acquisition.

The company said it would fund an acquisition through separate funding arrangements.

Sky City already has an Australian presence, as the owner of casinos in Adelaide and Darwin.

Shares in Sky City were down 9c at $4.78 in a broadly weaker market this afternoon.

- NZPA