As reported by: Reuters
Casino operator Sky City Entertainment Group said it had reached an agreement to buy a stake in the Christchurch casino for $93.8 million from the shareholders of Aspinall NZ.

UK-based gambling business Aspinall holds an effective 40.5% shareholding in Christchurch Casinos, the owner and operator of the Christchurch casino.

"Whilst the investment will not confer a controlling position in the underlying assets, Sky City considers that the proposed purchase provides a unique oppourtunity to gain a significant interest in a quality New Zealand gaming/entertainment asset at a favourable price," the company said in a statement.

The acquisition, conditional on regulatory approval, would be fully debt funded, Sky City said.

The Christchurch casino (CCL) operates 500 gaming machines, 45 gaming tables, two restaurants and three bars.

Major stakeholder, unlisted Queenstown-based company Skyline Enterprises, had also been interested in purchasing the Aspinall stake, tagged with a valuation of $92 million.

Sky City has casinos in Auckland, Queenstown, Hamilton, Adelaide, and Darwin. The company posted a 4% rise in first half profit to $55.1 million.

The purchase of the Aspinall stake will also give Sky City a one third stake in a Christchurch hotel and a minority stake in the Dunedin casino.

Sky City said the purchase price was consistent with a multiple of 7.8 times CCL's historical net surplus.

In February Sky City bought a hotel and casino in the Australian city of Darwin for $150 million, based on an enterprise value-to-core earnings multiple of 7.3 times, compared with a multiple of 8.9 times for its Adelaide casino purchase in 2000.

Sky City shares, which were on a trading halt pending the announcement, were trading down 6c at $4.39 at 12.30pm on Monday.