\u201cSkyCity advises that in May, it received a confidential, unsolicited, conditional, non-binding indicative proposal from a special situations fund managed by Oaktree Capital Management, L.P, to acquire all of the issued shares in SkyCity at an indicative price of 70c cash per SkyCity share, and another party at an implied indicative price of 75c cash per SkyCity share,\u201d it said today.<\/p>\n
Both indicative proposals were subject to numerous conditions, including a period of at least eight weeks\u2019 due diligence and arranging debt financing. <\/p>\n
The SkyCity Grand Hotel at 90 Federal St, Auckland. Photo \/ CBRE<\/p>\n
\u201cThe proposals were also conditional on agreement on transaction structure, negotiation of binding documentation, unanimous SkyCity board support, SkyCity shareholder approval, regulatory approvals, and acquirer internal approvals, amongst other matters.\u201d<\/p>\n
SkyCity was also requested by one or both parties not to enter into any binding agreement to acquire or dispose of any assets.<\/p>\n
The company has an asset monetisation programme underway.<\/p>\n
It also had to provide exclusivity and retain its existing debt facilities.<\/p>\n
SkyCity Adelaide, which the company is considering selling. Photo \/ Joe Nes<\/p>\n
\u201cThe SkyCity board carefully considered these indicative proposals, with input from management and advisers. The board unanimously determined that these proposals did not adequately reflect the underlying value of the company, and that the conditions were problematic. <\/p>\n
\u201cThe parties were advised that SkyCity was not prepared to proceed on the terms proposed. <\/p>\n
SkyCity did indicate to each party that it was prepared to consider engaging further, including providing due diligence information, if they provided a revised proposal which addressed these issues. <\/p>\n
Neither party submitted a revised, improved proposal.<\/p>\n
Oliver Mander of the Shareholders Association said there was no onus on the company to have declared that May offer.<\/p>\n
Offers which had many conditions in particular were often not announced because boards were less likely to take them seriously, he said.<\/p>\n
The company is now trading below its May share price, at around 66cps.<\/p>\n
It plans to lay off<\/a> 200 to 250 staff, mainly in Auckland, to reduce corporate costs following a rising labour bill reported in a downbeat full-year result today.<\/p>\n The company has also announced it is considering selling its Adelaide hotel and casino.<\/p>\n