Australian gaming and leisure company Aquis Entertainment Ltd. has agreed to sell the gaming operations for its Casino Canberra property in the Australian Capital Territory–-the winning bid was for US$42.4 million, submitted by Iris Capital, which is based in New South Wales.
Aquis had previously been in negotiations with Capital Leisure & Entertainment Pty Ltd., whose latest offer came in at $39.2 million.
Iris had submitted a previous offer of $40 million last week, but upped its own offering in order to stave off Capital, which was also aggressively pursuing a deal.
Aquis said in a securities filing that Iris’ winning offer represented a “material premium” to Capital’s, and added that it increases the certainty of execution “ through the receipt of 100% of the purchase price into a trust account ahead of completion.”
The new sales agreement will now be subject to approval from both shareholders and local regulators. There is still a chance, however, that Aquis could receive yet another offer, and a break fee of $678,500 (AU$1 million) has been established should Aquis wish to explore other options again.
Aquis said in a statement that its board is “undertaking a review as to the best use of the sale proceeds, including assessing alternative business opportunities, repayment of debt and a potential distribution of funds to shareholders.”
According to Inside Asian Gaming, Aquis and Capital originally entered into a sales agreement back in May to sell Aquis Canberra Pty Ltd. (which holds Canberra’s casino license) for a price of $36 million, but Aquis requested a halt to trading earlier this month after receiving a “materially higher” offer from an undisclosed third party (Iris).
Shortly after the request was made, Capital then upped its offering to the aforementioned $39.5 million, and the two parties also agreed to a severance fee of $678,500 should Aquis renege on the deal in favor of a better offer, which it eventually did.
Aquis’ decision to sell the Casino Canberra ops came after the company was unable to secure licensing needed for a $200+ million renovation that would have included allowances for 500 slot machines—under local law, the casino is currently barred from operating slots.
The Australian Capital Territory state government denied the request in late 2018, but countered with a significantly reduced offer that included just 200 slots, which Aquis declined.
