Queensland gambling company Unitab's purchase of a stake in casino operator SkyCity has prompted takeover talk - and speculation about Unitab's motives.
The Australian newspaper reported yesterday that Unitab was positioning itself for takeovers and consolidation in the gaming sector.
However, the Bloomberg news service said Unitab's stake of more
than 2 million shares was only about 0.5 per cent of SkyCity.
"It hardly gives them a place at the table - so what's their game?" asked one institutional sharebroker.
Asked about the buy, Unitab chief executive Dick McIlwain said from Brisbane: "We're always interested in what's happening in the sector.
"It's just a little side interest and we've got no particular intention of doing any more with it."
Forsyth Barr analyst Jeremy Simpson said a takeover bid for SkyCity had been a possibility for some time. "It's got an open register and various strategic assets, so it doesn't surprise me that people are looking at it."
The Australasian gambling sector had already experienced "huge consolidation" in the past three or four years, with SkyCity itself buying casinos in Adelaide and Darwin.
Unitab operates TABs in Queensland, South Australia and the Northern Territory, as well as running internet betting and an extensive gambling management service in NSW and Queensland.
Paul Robertshawe, of Tower Asset Management, said a slump this year in SkyCity's stock price could have stoked speculation the company was a takeover target.
"All of these assets are regulated monopolies. Those sort of market positions are always attractive, it's a matter of what price you have to pay to establish them."
SkyCity owns Auckland's only casino, and gaming venues in Darwin and Adelaide, the biggest cities in the Northern Territory and South Australia, where Unitab has wagering monopolies.
SkyCity spokesman Paul Gregory said: "We don't really have any comment on the Unitab activity, that's for them to engage on."
- BLOOMBERG, NZPA, staff reporter
