Oscars ups ante in Casino Canberra battle

A take over battle has led to a spike in the sale price for the company that owns the ACT casino group.

A bidding war looks set for Casino Canberra.

Billionaire Sam Arnaout is looking to seize control of Casino Canberra by paying $60m for the property and adding it to his gaming empire which includes pubs across NSW and the Alice Springs casino.

The property developer and publican has built up a network of gaming properties and apartment projects which have put the low profile former panel beater on the path to a $2bn fortune.

Now he is looking to top an offer for Tony Fung’s listed Aquis Entertainment made by rival pub heavyweights Oscars Group.

Oscars had topped up its price for the company to $58.2m but the target revealed on Wednesday afternoon that it had received a further revised proposal from Mr Arnaout’s Iris CC Holdings Pty Ltd.

“The Aquis board will consider the Iris Capital proposal and update Aquis shareholders and the market in due course,” the company said in a statement.

The battle casts a rare public spotlight on both the gaming sector – with Mr Arnaout to emerge as an unlikely tycoon with national holdings – and on the battle for control of big gaming properties.

Pubs are selling nationally at elevated volumes and prices, partly as lenders believe they offer a resilient income stream that will survive both Covid and any recession.

Earlier on Wednesday Oscars was readying to fork out a higher price to buy the Casino Canberra from Aquis after upping its initial $52m bid.

The listed company came out of trading half on Wednesday and said it had received an unsolicited offer to acquire Aquis Canberra from a third party – later revealed to be Iris – at a price materially higher than it agreed with Oscars.

Aquis told Oscars that unless it was willing to increase its offer above the interloper’s bid – which was sweetened once – it would call off the deal.

But Oscars had come back and agreed to pay $58.2m to take control of the company. Aquis will pay a $1m break fee if Iris completes its deal at the higher $60m price.

The transaction is subject to Aquis shareholder approval and ACT government casino and liquor licensing regulatory approvals, and any consents required for the change of control of Casino Canberra’s casino license.

The probity approval process is underway and the Oscar’s unit buying the casino, Capital Leisure and Entertainment, made an initial submission to the regulator.

One drawcard of Aquis is that the company has not run into the regulatory problems that have hit Crown Resorts and Star Entertainment Group.

Last year, Sydney pub and development entrepreneur Mr Arnaout joined the ranks of casino moguls with the $105m purchase of the Alice Springs casino.

His private Iris bought the casino from Singapore-based Lasseters International Holdings, and has pledged to overhaul the ageing Northern Territory property.

The billionaire Mr Fung is a big player in horse racing and breeding but retired as chairman of Canberra-based Aquis Entertainment in August last year, saying the board needed to be independent of its major shareholder. Fung holds just under 90 per cent of Aquis.

Completing a sale at a higher price will see Aquis finally offload the property after years of trying to sell, with plans to offload the casino to the iProsperity empire assembled by the fugitive Michael Gu collapsing ahead of his 2020 disappearance.

That deal to sell Casino Canberra was priced at $32m in late 2018 but it was terminated in early 2020 as Aquis refused to give iProsperity more time to win regulatory approval to buy the property. Months later, iProsperity collapsed and Mr Gu fled Australia.

Mr Fung picked up Casino Canberra from Casinos Australia for just $6.5m in 2014 and then pumped capital into it. The ACT government in 2018 rejected a proposal by Aquis to transform the casino and the surrounding precinct.

The company in 2015 unveiled plans to outlay $330m on overhauling the Glebe Park precinct, including hotels, prestige brand shopping, and a new convention centre.