KEY POINTS:
US private equity giant Providence Equity Partners is at the forefront of speculation about the mystery buyer for Sky City.
Sky City shares gained 21 per cent in a frenzy of buying on Friday after management disclosed that an anonymous party had expressed interest in acquiring 100 per cent of thecompany.
The mystery party was proposing a cash offer at a significant premium to the current share price, the company said in a notice to the stock exchange on Friday morning.
Market sources indicated the bidder was a private equity player rather than one of the major Australian casino operators.
Tabcorp, which had previously been seen as a likely contender, said it was the not the party referred to in the notice.
Senior sources within the private equity sector are tipping Providence Equity Partners - a specialist investor in media, entertainment and communications companies.
Based in Providence, Rhode Island - with offices in New York, London, New Delhi and Hong Kong - the firm manages funds worth US$21 billion.
It owns Kerasotes Theatres, one of the top US cinema chains, as well as holding stakes in Warner Music Group and Metro-Goldwyn-Mayer.
Last year it was part of a consortium that bought out Bahamas-based casino group Kerzner for more than US$3 billion.
Following Friday's market rise, Sky City now has a market capitalisation of $2.39 billion. Its shares will begin trading at $5.28 this morning.
Brokers and fund managers have expressed outrage at the way the news was disclosed to the exchange - buried in the second half of a notice about profit redistribution.
Sky City management has since tried to downplay speculation saying the approach was at a very early stage and would not have warranted disclosure had it not been for a technicality related to the profit redistribution.
