Donaco International Limited has entered a binding acquisition scheme with On Nut Road Limited at A$0.045 per share, deemed fair and reasonable by an independent expert. The Board unanimously recommends shareholder approval ahead of the August 2025 vote.
- Binding Scheme Implementation Deed with On Nut Road Limited
- Scheme Consideration of A$0.045 cash per Donaco share
- Independent Expert’s Report confirms fairness and reasonableness
- Donaco Board unanimously recommends voting in favour
- Scheme Meeting scheduled for 4 August 2025
Background and Transaction Overview
Donaco International Limited (ASX – DNA), a leisure and entertainment company operating casinos in Southeast Asia, has formalised a binding Scheme Implementation Deed with On Nut Road Limited (ONR) for the acquisition of all outstanding shares it does not already own. The proposed Scheme of Arrangement offers Donaco shareholders A$0.045 cash per share, representing a significant premium to recent trading prices.
The Scheme Booklet, including the Independent Expert’s Report prepared by BDO Corporate Finance Ltd, has been registered with the Australian Securities and Investments Commission (ASIC) and dispatched to shareholders. The Scheme Meeting is set for 4 August 2025, where shareholders will vote on the proposed acquisition.
Independent Expert’s Assessment and Board Recommendation
BDO’s Independent Expert has concluded that the Scheme is both fair and reasonable, and in the best interests of Donaco shareholders, assuming no superior proposal emerges. The valuation range for Donaco shares on a controlling interest basis is between A$0.041 and A$0.064, with the Scheme Consideration of A$0.045 per share falling within this range.
Reflecting this assessment, the Donaco Board has unanimously recommended that shareholders vote in favour of the Scheme. The Board’s endorsement is supported by the absence of any superior proposals since the announcement of the Scheme in March 2025, and the substantial shareholding interests of key directors and major shareholders who have committed to vote in favour.
Valuation of Key Assets and Operational Context
Independent property expert Knight Frank has valued Donaco’s principal assets, including the Star Vegas Resort & Club in Poipet, Cambodia, and the Aristo International Hotel in Lao Cai, Vietnam. Both properties were appraised on a going concern and vacant possession basis, with the going concern valuations reflecting ongoing operations and gaming licenses.
Donaco’s operations face several challenges, including new gaming legislation in Thailand that could legalize casinos domestically, potentially reducing cross-border patronage to Donaco’s Cambodian casino. Additionally, Donaco is engaged in a tax dispute with Vietnamese authorities concerning the treatment of floating chips at the Aristo, and recent border restrictions between Thailand and Cambodia have impacted casino visitation and revenues.
Next Steps and Shareholder Considerations
Subject to shareholder approval at the Scheme Meeting and subsequent court approval, ONR will acquire all outstanding shares and Donaco will be delisted from the ASX. Shareholders are advised to carefully review the Scheme Booklet, including the Independent Expert’s Report, and consider the operational risks and regulatory environment impacting Donaco’s business.
Shareholders unable or unwilling to attend the Scheme Meeting are encouraged to lodge proxy votes by 2 August 2025. The Board has also highlighted that shareholders will not incur brokerage fees if the Scheme proceeds, providing a cost-effective exit opportunity.
Bottom Line?
Donaco’s proposed acquisition by ONR offers a premium exit amid regional uncertainties, but shareholders must weigh operational risks ahead of the August vote.
Questions in the middle?
- Will any superior proposal emerge before the Scheme Meeting or court approval?
- How will Thailand’s evolving gaming legislation impact Donaco’s border casino revenues?
- What is the potential financial impact of the ongoing tax dispute in Vietnam on Donaco’s valuation?