[COM] SkyCity Adelaide Casino Expansion | 55m | 12 Levels | Hotel

[how good is he]

Yes and the govt (=us) would get sued for millions for breach of contract. Strange though if they don't go ahead as I am pretty sure they have signed to leasing 700+ carparks in the Govt/Walkers new development (& so allowed it to start).

[citywatcher]

They are the ones breaching the contract

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[how good is he]

While I definitely think the development needs to go ahead and should happen asap ...
But citywatcher can you explain to the forum what specific part of the "contract" they are breaching?
Their expansion plans have never been signed off with the govt. The board is still assessing whether to proceed. And I believe unless they can negotiate a satisfactory agreement with the govt, they may not proceed.
Sure they have development approval but how many developments get approved and take years to begin (and many never begin). Again not saying it's good but it's their call (not yours or the govt's) to make them spend $300m.

[[Shuz]]

I was of the impression that the latest round of gaming and taxation concessions was contigent on them proceeding with the hotel development within a specified timeframe.

If this was ever put pen to paper, thats a breach of contract.

[citywatcher]

Exactly
Government has more than one way to skin a cat

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[how good is he]

Yes I am sure the Govt has offered incentives etc but possibly they aren't enough. It may be un-related but in the past 2 years there are some 15 new hotels/serviced apartments either underway and/or in the pipeline for the CBD!! That's more than in the whole 15 years combined! Sure some may not eventuate but what is saturation point? I have spoken to a major operator of hotels here and he says there's demand for maybe 3-4 new 4-5 star hotels/apartment towers before they start to cannibalise the market/room rates. With Holiday Inn, Adelaidean (new operator to be named) already underway and Sofitel, Echeleon starting by the end of the year. Plus apartment towers which then become re-branded (ie West Franklin - Oaks has pre-committed to a certain amount of rooms.) I look forward to see what happens with Bohem, Park Central, Park Square, Kodo and many others...further I think the Casinos profit growth last year was around only 1.8% (and that's after a supposed $50m renovation).

[rev]

Time to bring in another casino operator. Enough is enough with these jokers.
Setup a new casino nearby, brand new multipurpose entertainment complex. Bring Crown in. With Port Adelaide Football Club establishing business links in China, we could grab a slice of the high rollers market from China who frequent Crown Melbourne. There's a private jet there. Short flight to Adelaide.

Then when the lease expires for Skycity in the old station building, do not renew it and evict them. Then turn the old railway station building into a boutique hotel with fancy restaurants or whatever. Put it to good use instead of wasting it on a casino operator who doesn't give two shits about Adelaide.

[how good is he]

While I totally agree and would love to see a Crown/a major competitor to Skycity, the problem is they have a 30 year Monopoly/Exclusive casino license. If the govt did want to terminate their agreement the payout to Skycity would be massive - hundreds of millions... Would you agree to the govt doing this to try get rid of them? The best outcome would be if a bigger operator like Crown launched a takeover bid for Skycity. But it's unlikely if Skycity's figures/profits aren't that strong anyway.

[citywatcher]

They are not adhering to the terms of the lease.
They expect the govt to fund the expansion are just looking for a way out anyway

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[how good is he]

Once again I ask you Citywatcher, specifically what terms of the lease are they not adhering to?
Or are you just speculating?
Can I suggest they (the board) would be sacked/severely fined by their shareholders or in fact the relevant authorities if in breach of their lease/casino license. Can I also suggest if the $300m expansion turns into a white elephant/flop and is not based on sound economic business plan etc they could actually be putting their shareholders investment and their company at risk/in peril. No offence Citywatcher but why not put your money where your mouth is and buy some Skycity shares so you can have a vote/say?

[OlympusAnt]

Bring in Caesars Entertainment

[how good is he]

Oh and possibly more critical in this debate is how the Chinese overseas junket/high rollers market has evaporated/collapsed overnight. This was for example Crowns highest turnover/most significant profit driver. This was the market intended to fund The $1billion Barangaroo Casino (as well as Adelaides expansion). Please google - Crown - employees arrested and languishing in a Chinese jail (with no charges even laid as yet).

[citywatcher]

Once again I ask you Citywatcher, specifically what terms of the lease are they not adhering to?
Or are you just speculating?
Can I suggest they (the board) would be sacked/severely fined by their shareholders or in fact the relevant authorities if in breach of their lease/casino license. Can I also suggest if the $300m expansion turns into a white elephant/flop and is not based on sound economic business plan etc they could actually be putting their shareholders investment and their company at risk/in peril. No offence Citywatcher but why not put your money where your mouth is and buy some Skycity shares so you can have a vote/say?

If I was putting my money where my mouth was I'd be avoiding their shares like the plague. Oh , guess what.

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[how good is he]

Why citywatcher? That way you could start a motion to vote the board out and run as a candidate - maybe as the new CEO?

[how good is he]

Skycity Entertainment investors threaten EGM to vote on chairman Chris Moller’s exit
(* And imagine - replace him with Citywatcher)

BRIDGET CARTER
The Australian5:22PM December 6, 2016

Investors in Skycity Entertainment Group are believed to be threatening to call an extraordinary general meeting to vote on the departure of the company’s chairman Chris Moller if he does not step down from the job.

The push is believed to be led by major institutional investors, including Perpetual, Investors Mutual and Maso Capital, sources said on Tuesday night.

It is understood that the move comes partly on the back of what they claim is a reluctance by Mr Moller to engage with the board of The Star Entertainment Group about a potential merger deal.

Mr Moller, the former chief executive of the New Zealand Rugby Union and The Star chairman John O’Neil — former Australian Rugby Union boss dealt with each other over the bid for the rugby World Cup about a decade ago when the Kiwis missed out on hosting the event, and it is understood that Mr Moller is said to not have a cool relationship with the chairman of the rival casino operator.

It is understood that some shareholders feel that bad blood between the pair could be preventing a transaction happening.

Investors are lobbying for a merger between Skycity, which has a $2.5bn market value and The Star, currently worth $4.2bn.

It is understood that The Star Entertainment Group’s chief executive, Matt Bekier, has expressed his willingness to embark on a merger with the rival casino operator across the Tasman, subject to price.

The share prices of both companies are currently trading at a level where a merger makes sense.


Another point of contention is that Skycity has a property portfolio of about $1.5bn, and investors are aggrieved that the group embarked on a capital raising at $4.40 per share instead of selling off part of its real estate portfolio to boost cash levels to fund developments.

Both companies could not be reached for comment Tuesday evening.

The Sky City share price closed at $3.67, down from about $5 in the middle of the year, while shares in The Star Entertainment Group closed at $5.14, down from about $6 in October.

The Star Entertainment Group owns The Star casino in Sydney, Jupiters on the Gold Coast and Treasury Casino in Brisbane.

Skycity Entertainment owns casinos in Auckland, Adelaide and Darwin.