Iris Capital has tabled an all-cash, AU$177 million (US $116 million) bid—equivalent to AU$3.5541 per unit—to acquire Reef Casino Trust (RCT), the landlord of Cairns’ Reef Hotel Casino. The price reflects a 17.7 % premium to the 11 July close and roughly 30 % above February’s pre-negotiation level, immediately lifting RCT’s unit price and spotlighting Far North Queensland’s tourism play.
Offer Economics and Key Metrics
| Item | Detail | |
|---|---|---|
| Equity value | AU$177 m (US $116 m) | |
| Cash price per unit | AU$3.5541 | |
| Premium to 11 Jul close | 17.7 % | |
| Premium to 25 Feb price | 30 % | |
| Minimum acceptance | 80 % of units | |
| Major backers | Accor & Casinos Austria (>70 % combined) | |
| Regulatory clearances | Queensland casino & liquor, ACCC, no MAC |
Shareholder Alignment
Accor and Casinos Austria International—together controlling more than two-thirds of the register—have given conditional support, greatly de-risking execution once regulatory hurdles are cleared. RCT’s independent board chair Wendy Morris called the proposal “a transaction that will deliver value to unitholders,” underlining the board’s unanimous recommendation.
Financial Backdrop
Operationally, RCT’s top line was steady, yet management guided to first-half 2025 distributable profit of AU$3.2–3.8 million—about 19 % below the prior period. Higher compliance spend, inflation-linked payroll pressure and a supervisory levy drove the contraction.
Electronic gaming machines (EGMs) remain the bulwark, delivering AU$25.2 million in rental income during 2024 and 68 % of the venue’s take, while premium-play table revenue softened on fewer high-roller visits.
Leadership Transition
Long-serving CEO Paul McHenry stepped down in March 2025 after nearly three decades; new chief Brad Sheahon inherited the bid process and a stabilising post-pandemic tourism base.
Deal Structure and Conditions
The proposal captures not only RCT units but also Casinos Austria International (Cairns) Pty Ltd, which operates the casino, and Reef Corporate Services Ltd, the sub-lessor and manager—so the equity and operating stack change hands together. Completion hinges on the 80 % acceptances, no material adverse change, plus Queensland and ACCC clearances; exclusivity and break-fee provisions protect Iris.
Strategic Rationale for Iris Capital
Success would hand Iris its third Australian casino, adding Cairns to Canberra and Alice Springs and deepening a 60-venue hospitality footprint. The asset offers year-round tourist flow, valuable hotel keys and a proven EGM engine in a one-casino town—an attractive platform despite headline profit pressure.
Pros and Cons for RCT Unitholders
Pros:
All-cash certainty at a double-digit premium; rapid liquidity amid a thinly-traded security.
Sponsor with proven regional gaming expertise and capital for asset refresh.
Risk transfer of future regulatory costs and refurbishment capex.
Cons:
Upside forfeited if Cairns tourism—and high-margin premium play—rebounds faster than forecast.
Deal contingent on multiple licences and competition clearance, prolonging closing.
Loss of distribution yield should unitholders prefer income to exit value.
Frequently Asked Questions
Q1: What happens if regulatory approval is delayed?
The offer lapses unless conditions are satisfied; Iris may extend the bid, but unitholders retain withdrawal rights after the first extension.
Q2: Will unit-holders owe tax on the cash consideration?
Australian resident investors will incur CGT; the cost-base is the original purchase price of the units. Non-residents should seek local advice.
Q3: Could a higher rival bid emerge?
The board’s exclusivity agreement includes a “no-shop/no-talk” clause, yet it can engage on a bona-fide superior proposal; Morris Group previously sounded out a higher enterprise value but at a lower unit price.
Q4: When will the bid documents arrive?
Iris plans to dispatch its Bidder’s Statement between 10–12 September 2025, followed by RCT’s Target Statement before 29 September.
