Sky City touted as possible buyer of Unitab

New Zealand-listed casino operator Sky City Entertainment is viewed as a possible buyer of Australian gaming assets worth up to $1 billion.

Goldman Sachs JBWere analyst Marcus Curley said SkyCity would be "one of the main potential acquirers" of the gaming businesses of Queensland-based Unitab, The Dominion Post reported today.

Sky City shares closed at $5.37 last night.

A takeover battle for Unitab is under way between rival Australian gaming companies Tabcorp and lottery operator Tattersall's.

Melbourne-based Tabcorp has received unsolicited expressions of interest for Unitab's gaming businesses and had implied it would sell at the right price, Mr Curley said.

Mr Curley suggested Tabcorp could realise a relatively high price of between A$710 million ($851.3 million) and A$920 million ($1.1 billion) million for the Unitab gaming interests.

Victorian firm Tattersall's was the other likely acquirer, he said.

Market speculation was that SkyCity was awaiting the outcome, and could buy gaming assets as a result of any deal that might be reached.

Sky City would not comment on the speculation.

Last month, independent expert Deloitte Corporate Finance Pty Ltd endorsed the proposed merger between Unitab and Tattersall's, saying it was in the best interests of shareholders barring a higher offer.

Tabcorp subsequently launched a $1.9 billion ($2.27 billion) takeover bid for Unitab, but the Unitab board has rejected the offer as inadequate and noted it had already endorsed the merger with Tattersall's in the absence of a superior offer.

Tabcorp has since formally questioned the report , saying in a letter to Deloitte dated June 8 that it has a number of concerns and queries in relation to it.

In a letter notifying Unitab directors dated June 12, Deloitte said it had considered Tabcorp's concerns and did not feel they contained material information that Deloitte had not considered in preparing its report.

"Accordingly, we do not believe any of the matters raised in Tabcorp's letter would cause us to change the conclusions stated in our expert's report dated May 31, 2006," Deloitte said.

Unitab reiterated its opinion that the Tabcorp offer was inadequate and advised shareholders to take no action in relation to the offer and wait for the release of Unitab's target's statement.

Tabcorp's bid includes an all-scrip offer and an alternative cash-and-scrip offer, both valuing Unitab shares around A$14.25 each.

Tattersall's has made an A$1.7 billion offer of 4.33 of its shares for each Unitab share or A$14.00 in cash, subject to a possible scaleback.

- NZPA