Reef Casino Trust (RCT) said it has agreed to a sweetened takeover offer from property investor Iris, which raised its bid to AU$3.87 ($2.52) per unit in a deal that values the trust at about AU$192.7 million ($125.6 million).
The new terms follow amendments to the takeover implementation agreement between RCT’s responsible entity, Reef Corporate Services, and Iris, lifting the previous AU$3.72 ($2.42) offer. The increase also raises the associated break fee to AU$1.9 million ($1.2 million).
‘The revised proposal will deliver additional value to unitholders’, said Independent Board Committee chair Wendy Morris in a dispatch.
Under the plan, Iris will make an off-market cash bid for all 49.8 million units in RCT, which owns Cairns’ Reef Hotel Casino. The offer represents a 4.3 percent premium to Wednesday’s closing price, and more than 40 percent above levels in February when Iris first approached RCT.
RCT’s board unanimously recommended the deal, subject to regulatory approvals and an independent expert declaring it fair and reasonable. The board members also said they intend to accept the offer for their own holdings.
Based in Sydney and part of Iris Capital, the Iris Hotel Group operates 13 hotels and two casinos, namely Casino Canberra – the first legal casino to open in Australia and formerly operated by Aquis Entertainment – and the Lasseters Hotel Casino in Alice Springs.
The trust’s two largest unitholders — France’s Accor and Casinos Austria International — who together control over 71 percent of units, have signalled support. They plan to accept the bid in the absence of a higher rival proposal.
The offer still faces conditions including an 80 percent acceptance threshold, approvals from casino and liquor regulators in Queensland, and final sign-off on related share purchase agreements.
The bidder’s statement is due to be lodged with regulators on August 29th, with RCT’s formal response expected by late September.
