NZ's Sky City notes second potential bidder

WELLINGTON,

(Reuters) - Sky City Entertainment Group Ltd, New Zealand's leading casino operator, said it expected a second company to examine its books, raising the prospect of a bidding war that analysts said could top US$2 billion.

Sky City (SKC.NZ: Quote, Profile, Research, Stock Buzz) is already being scrutinized by one unnamed potential bidder, with a decision on a bid expected by the end of this month. The emergence of another interested party pointed to at least one firm offer being made soon, analysts said.

"Any party that decides to go down the route of doing due diligence would suggest they're serious about it," said Craig Brown, principal at Walker Capital Management, adding Sky City's share price rise to near record levels indicated the market was waiting for the bidding to start.

On October 5, Sky City executive director Elmar Toime told Reuters he saw the potential for more than one bid to be made.

Shares in Sky City, which has a virtual monopoly on casinos in New Zealand and also operates in Australia, were up 1.1 percent at NZ$5.39 by 0245 GMT.

The stock has jumped more than a quarter since September 21 when the company said it had received an approach about a possible takeover.

Sky City said on Wednesday it had received fresh expressions of interest and expected at least one of those to result in financial and commercial due diligence.

Private equity or global gambling operators have been touted as the most likely suitors.