SkyCity bid may involve ex-boss

Former managing director Evan Davies could be involved with a group eyeing a bid for SkyCity Entertainment Group.

Mr Davies, SkyCity's founding managing director, departed abruptly in June with a $2 million payout after 11 years at the helm, amid shareholder frustration with the casino operator's deteriorating financial performance.

Last Friday, SkyCity said it had received an "indicative and confidential" approach from a party expressing interest in buying 100 per cent of its shares at a "significant premium".

The potential cash offer was, however, subject to conditions. SkyCity has added nothing since.

The potential bidder is believed to be TPG Newbridge, an American private equity fund with more than US$30 billion (NZ$40 billion) under management.

TPG has declined to comment on what it terms "market speculation".

Consisting of Texas Pacific Group and Asia-Pacific affiliate Newbridge Capital, TPG is acquiring Harrah's Entertainment which operates casinos in the United States, Britain, Egypt and South Africa.

Harrah's held a management contract for SkyCity's Auckland Casino in the mid-1990s before the Kiwi company, under Mr Davies' leadership, bought it out in 1998.

At the time Mr Davies said he wanted a stronger New Zealand identity stamped on the casino.

He could not be reached for comment yesterday.

Meanwhile, some fund managers who are frustrated with SkyCity's board want to be the judges of any formal offer for the company.

One man said he wanted any bids put in front of shareholders rather than hearing of board decisions on whether they reflected fair value.

SkyCity shares fell 1 cent to $5.05 yesterday.

Mr Davies holds 5.1 million SkyCity shares and 687,970 share rights.

- © Fairfax NZ News