Cairns casino set to change hands for $177m
The Reef Casino Trust share price has surged after a $177m takeover offer by Iris Capital in an apparent victory over rival bidder Chris Morris, who had his eye on the tourism and gaming asset.
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The Reef Casino Trust share price has surged after a $177m takeover offer by Iris Capital in an apparent victory over rival bidder Chris Morris, who had his eye on the tourism and gaming asset.
Earlier this year, the gaming and tourism entrepreneurs, Mr Morris of the Morris Group, and Sam Arnaout, of Iris Group, were locked in a battle to acquire the casino which is one of the region’s largest tourism assets.
On Monday, the trust’s share price surged 38 cents to a three-month high of $3.40 off the back of the bid, which has gained the support of its largest shareholders – Accor and Casinos Austria International.
Iris will make an off-market cash takeover bid to acquire all of the ordinary units in Reef Casino Trust, according to the Reef Casino Trust market announcement on Monday.
Reef Casino Trust chief executive Brad Sheahon said there was an independent board committee established by the board of Reef Corporate Services Limited to consider the offer and all directors are recommending the trust goes ahead with the deal unless a superior offer emerges.”
“(The offer) is subject to an independent expert concluding the offer is fair and reasonable or, if not fair but reasonable, that the other transactions contemplated by the Takeover Implementation Agreement do not amount to a net benefit,” Mr Sheahon said.
The Cairns-based chief executive would not be drawn on the value of the Morris Group offer but did say the two bids were “different in nature and had different conditions”.
Mr Morris is the co-founder of Computershare and owns luxury outback accommodation at Mount Mulligan Lodge, the Ville Resort-Casino in Townsville and the Orpheus Island Lodge.
Morris Group offered an alternative proposal to acquire the Cairns asset in April following the trust revealing it was in talks with Iris in February.
Mr Sheahon said while the deal was in the settlement stage, there would be no changes to day-to-day operations of the business,
“We can’t talk to what plans Iris has for the complex once they own it,” he said.
Iris Capital, the owner of casinos in Canberra and Alice Springs as well as more than 60 pubs and hotels, entered into a takeover bid agreement to acquire all shares at $3.5541 each.
Casinos Austria and Accor have owned about 72 per cent of the trust since 2000 and the remaining units are owned by independent investors and actively traded on the ASX.
For the takeover deal to go ahead 80 per cent of shareholders have to agree to the sale and if a threshold of 90 per cent is achieved the takeover bid is guaranteed.
In 2020, Iris Capital acquired a 17-hotel Ibis portfolio from AccorInvest in a move aimed at expanding its presence in the hospitality sector, however it’s unknown if the Pullman-branded Reef Hotel Casino, also an Accor brand, will change its name when the property settles next year.
If the deal goes through, it will be the first time the property has changed hands since the Reef Casino Trust started trading in January 1996.
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Originally published as Cairns casino set to change hands for $177m
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