New Zealand casino operator Sky City Entertainment Group sees the possibility of more than one bid, as a potential buyer looks at its books over a deal that could be worth around 1.9 billion.
Executive Director Elmar Toime told Reuters on Friday that the unnamed bidder's decision to conduct due diligence could spark other bids.
"The interest is there, whether the timing is right, or people have the wherewithal is the great unknown," Toime said.
Sky City, which has a virtual monopoly on casinos in New Zealand and also operates in Australia, has been actively seeking buyers since receiving the approach in late September.
Earlier on Friday, the Australian Financial Review newspaper said private equity group TPG was the favourite to take over Sky City after another private equity firm rumoured to be interested, New York-based Providence Equity Partners, did not make a bid.
Australian competitors of Sky include Tabcorp Holdings, Tattersalls and Publishing and Broadcasting Limited. Tabcorp and Tattersalls have said they are not interested.
Shares in Sky City last traded unchanged at NZ$5.36, having gained 9.2% so far this year, compared to a 5.5% gain for the benchmark top 50 index.
Toime would not give the identity of the unnamed bidder, but said it was due to complete its due diligence on Sky City by the end of October. He also declined to comment on the Australian Financial Review article.
Private equity and Asian gambling operators have been touted as the most likely source of bids.
The sector in New Zealand is tightly regulated, and Toime said he was unsure if a bid by a foreign party to takeover Sky City would attract political or regulatory opposition.
Citigroup has said in a report that recent Australasian casino deals had an average enterprise value to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio of around 10 times.
That would indicate a private equity bidder paying about NZ$5.60 a share for Sky, valuing the company at $1.9 billion, said Citigroup analyst Andy Bowley.
In May, Sky City unveiled a programme to cut NZ$33 million in costs over 18 months, and said it might sell its Adelaide casino in Australia and one in Christchurch, as well as its cinema business.
Toime said indicative bids for the cinema business were expected by the end of October.