Darwin’s SkyCity Casino a done deal at $188m
US hospitality giant Delaware North has finalised deal to acquire the SkyCity Darwin Casino in a $188 million deal, down on the initial asking price of about $240 million.
The sale of SkyCity’s Darwin business to US-based, global hospitality operator Delaware North, flagged by The Australian last month, gives the US group a major foothold in the local gaming market.
The Australian revealed last month that Delaware North had entered due diligence to acquire the casino, knocking out other contenders, including the Morris Group and Asian-based property development group Taiwan’s Pau Jar Group.
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The incoming owner spruiked its commitment to the area. “Australia has been a second home for Delaware North for 30 years,” Delaware North co-chief executive Lou Jacobs says.
“With SkyCity Darwin, we are expanding our presence in the gaming and entertainment market. We look forward to working with SkyCity Entertainment Group to welcome their employees at SkyCity Darwin to the Delaware North family,” Jacobs says.
Buying the Darwin property gives Delaware North exclusivity over Darwin’s casino licence until 2036. The US group bought into the nation’s gaming market this year, purchasing two Brisbane pubs for more than $30 million.
Delaware North is known locally for owning the Lizard Island resort in Queensland, as well as food and beverage outlets across Australia.
Darwin’s SkyCity Cason has sold for $188 million.
SkyCity Darwin has been thought to be worth about $210 million-$250 million even after taking a $90 million valuation hit. In August analysts said that indicative bids for the Darwin property were above its book value of about $195 million.
The listed gambling company will sell the Darwin business, excluding the land it holds at Little Mindil, and SkyCity chief executive officer Graeme Stephens welcomed Delaware North as the successful bidder as it is a highly respected and well-established hospitality and gaming company.
The company’s 650 staff will be retained once the change of ownership takes effect.
Mr Stephens said the Darwin resort had been performing better financially over the past 12 months but SkyCity was now focused on its New Zealand home base and expanding its casino in Adelaide.
“Since we purchased the business in 2004 we’ve expanded and refurbished the resort, adding new restaurants and bars, VIP facilities, and a new five-star resort hotel,” he said.
SkyCity says its links with Darwin will continue for some time via the ongoing use of the casino’s VIP facilities for at least the next two years and because it also retains the rights to operate an online casino in partnership with Delaware North if one is granted.
“International business and online are both areas where we see growth potential so I’m pleased we are able to retain these links with the Darwin property,’’ Stephens says.
SkyCity will also keep the beachfront Little Mindil site and will run a separate process to sell the prime waterfront property.
The casino sale was being managed by Goldman Sachs.
– with Lisa Allen.
Additional reporting Sarah-Jane Tasker.
This article originally appeared on www.theaustralian.com.au/property.
