By PAUL PANCKHURST
Analysts and sharemarket investors differed yesterday on SkyCity Entertainment Group's latest buy, a 40.5 per cent stake in Christchurch Casinos.
The sharemarket was tepid on the $93.75 million deal and SkyCity shares closed down 5c, or 1 per cent, at $4.40.
Analysts were more positive.
ABN Amro's head of research, James
Miller, said the asset looked "fairly priced" for the dividends it had been paying.
Forsyth Barr analyst Jeremy Simpson said the price was "satisfactory" and his company saw no reason to change its positive view on SkyCity.
A report from sharebroker Macquarie said the deal looked "reasonable".
One broker said the market was "totally unconvinced, but I don't see why".
It might be expansion fatigue after the issues and criticism raised by February's Darwin casino purchase.
Also, the deal is small for a company with an enterprise value of close to $2.5 billion.
Christchurch Casinos owns and operates the Christchurch casino, and also has a 33 per cent stake in Dunedin Casinos.
SkyCity will have an interest in five of the country's six casinos.
The deal was executed through SkyCity's buying the shares of the company Aspinall NZ.
Through it, SkyCity also gains a 32.2 per cent shareholding in Victoria Hotels (Christchurch), owner of a four-star hotel next to the casino.
The man who fought against SkyCity buying into Christchurch Casinos, the company's chairman, Barry Thomas, is making no peace.
He told the Business Herald yesterday that "my stance hasn't changed one iota".
Thomas represents the company's other 40.5 per cent shareholder, Skyline Enterprises, of Queenstown.
Skyline was keen on buying the Aspinall stake and campaigned through the media against SkyCity, despite the pair's joint venture in the Queenstown casino.
SkyCity managing director Evan Davies telephoned Thomas yesterday morning to tell him of the deal, but the conversation went nowhere.
Thomas said: "It's the first time I've had a call from SkyCity in six months."
Davies said Thomas' reaction was "predictable".
Thomas had previously suggested SkyCity could be blocked from board representation if it bought the Aspinall stake.
Davies wondered "why on earth" SkyCity's extensive expertise would not be welcomed by the company.
He would not comment on what action might follow a block.
Asked how the parties would work together, Thomas said: "I don't know. I've no idea."
SkyCity says the deal's conditions included gaining approval from the Overseas Investment Commission, the Casino Control Authority and the Commerce Commission.
These were expected in six to eight weeks.
The nine-year-old Christchurch casino has 500 gaming machines, 45 gaming tables, two restaurants and three bars.
SkyCity describes it as "a successful and well-regarded business" that has grown in profitability.
Aspinall's stake in the company reaped a reported $8 million share of the profits for the 12 months to March 31 last year.
The balance of Christchurch Casinos is held by Southern Equities (8.6 per cent) and the British InterContinental Hotels Group (10.4 per cent).
Aspinall NZ was owned by the Aspinall gambling group, from Britain, and Kerry Packer's Consolidated Press Holdings, from Australia.
Davies said he hoped the Aspinall-associated managing director of the Christchurch casino, Arthur Pitcher, would stay in the role.
SkyCity would not operate the casino.
Asked how quickly SkyCity wanted to move to majority control, Davies said: "We haven't purchased with that expectation necessarily."
The purchase is debt-funded.
CASINO OWNERSHIP
SkyCity Casino, Auckland - 100 per cent SkyCity
Riverside Casino, Hamilton - 55pc SkyCity, 30pc Perry Developments, 15pc Tainui
Sky Alpine Queenstown - 60pc SkyCity, 40pc Skyline Enterprises
Wharf Casino, Queenstown - 38pc Michael Stone (Queenstown), 38pc Philip Griffith (Nevada), 9.5pc Raymond Pike (Nevada), 9.5pc David Wirshing (Nevada), 5pc Graham Smolenski (Arrowtown).
Christchurch Casino - 40.5pc SkyCity, 40.5pc Skyline Enterprises, 10.4pc Intercontinental Hotels Group, 8.6pc Southern Equities
Dunedin Casino - 42pc Earl Hagaman, 33pc Christchurch Casinos
By PAUL PANCKHURST
Analysts and sharemarket investors differed yesterday on SkyCity Entertainment Group's latest buy, a 40.5 per cent stake in Christchurch Casinos.
The sharemarket was tepid on the $93.75 million deal and SkyCity shares closed down 5c, or 1 per cent, at $4.40.
Analysts were more positive.
ABN Amro's head of research, James
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