Aquis Entertainment has accepted an AU$63 million (US$43 million) bid for Casino Canberra from development and hospitality group Iris Capital.
Casino Canberra, pictured above, is at a market disadvantage, because it is the only Australian casino not authorized to offer slots. (Image: The Sentiment)
The agreement followed a bidding war between Iris and rival Australian hospitality company Oscars Hotels. Oscars increased its original offer of AU$52 million (US35 million) to AU$58.2 million (US$39 million) last week but appears now to have bowed out of the race.
Aquis, controled by billionaire Hong Kong banker Tony Fung, acquired the property in 2014 for just AU$6 million (US$4 million).
What, No Slots?
The sudden escalation of bids was unexpected because Aquis has been trying to shift the casino for some time. The property’s value is impacted because the casino is the only in Australia that’s not permitted to offer slot machines.
Aquis lobbied the Australian Capital Territory (ACT) government for 500 slots soon after it acquired the casino. In return for the proposed concession, it promised it would plow AU$307 million (US$209 million) into regenerating the property, which it said had suffered from “years of underinvestment.”
Ultimately, the two parties failed to reach an agreement.
The casino was hit hard by pandemic-related trading restrictions and was propped up by a AUD$33 million (US$22 million) loan from Fung.
Owned by Australian billionaire Sam Arnaout, Iris currently counts Lasseter’s Hotel Casino in Alice Springs among its portfolio. The company has been on something of an acquisition spree, acquiring three hotels and two pubs this month alone, according to The Australian Financial Review.
Iris will acquire 100 percent of shares in Casino Canberra and its operating company, pending shareholder and regulatory approvals. Should a superior offer materialize, it has an agreement with Aquis to choose to submit a counteroffer, AFR reports.
“We are excited about the opportunity to acquire Casino Canberra and look forward to working collaboratively with the Aquis team in the future,” Arnaout said in a statement.
Blue Whale Fail
Fung first came to public attention in Australia almost a decade ago with a controversial proposal to build an A$8 billion (US$5.8 billion) megaresort casino in Cairns, close to the Great Barrier Reef.
To the delight of environmental campaigners, that project appears to have been abandoned.
In 2018, Casino Canberra was to be sold to Blue Whale Entertainment, but the company’s founder, high-rolling Chinese property developer Michael Gu failed regulatory checks.
In 2020, Gu became an international fugitive when his Sydney-based property group, iProsperity, collapsed, owing investors around US$245 million. His whereabouts are unknown.