Why Is Iris Offering a 17.7% Premium to Take Over Reef Casino Trust?

Takeover Agreement Reached

Reef Corporate Services Limited, acting as the responsible entity for Reef Casino Trust (RCT), has entered into a Takeover Bid Implementation Agreement with Iris Cairns Property Pty Ltd. Under the terms of the agreement, Iris will launch an off-market cash takeover bid to acquire all ordinary units in RCT at a price of $3.5541 per unit, valuing the total equity at approximately A$177 million.

This offer represents a significant premium over recent trading prices, including a 17.69% uplift compared to the closing price on 11 July 2025 and more than 30% above the price before the initial proposal was announced in February 2025.

Strong Board and Unitholder Support

The Independent Board Committee (IBC) of RCSL has unanimously recommended that unitholders accept the offer, subject to no superior proposal emerging, satisfaction of regulatory conditions, and a favorable opinion from an Independent Expert. All directors, including those holding units, intend to accept the offer once these conditions are met.

Notably, RCT’s two largest unitholders, Accor and Casinos Austria International, who collectively hold over 70% of the units, have expressed their support and confirmed their intention to accept the offer promptly, reinforcing the bid’s momentum.

Regulatory and Implementation Conditions

The offer is contingent on several key conditions, including a minimum 80% acceptance threshold, approvals related to casino and liquor licensing under Queensland law, non-objection from the Australian Competition and Consumer Commission (ACCC), and no material adverse changes affecting RCT. Additionally, share purchase agreements for the responsible entity and the casino operator must become unconditional.

The agreement includes exclusivity provisions protecting Iris’s position, such as no-talk and no-shop clauses, a break fee payable under certain circumstances, and a right to match competing proposals. As a result, RCSL has ceased discussions with other potential bidders.

Value Proposition and Next Steps

The offer provides RCT unitholders with a certain cash return at a premium to historical trading levels, a point highlighted by IBC Chair Wendy Morris, who described the transaction as delivering compelling value. Iris, owned by Iris Capital and with a portfolio including casinos in Canberra and Alice Springs, aims to expand its footprint with this acquisition of The Reef Hotel Casino in Cairns.

The indicative timetable anticipates Iris sending its Bidder’s Statement to unitholders between 10 and 12 September 2025, followed by RCT’s Target’s Statement with a detailed recommendation and an independent expert’s report around 29 September. The offer period is expected to close in March 2026, subject to extensions or changes under regulatory requirements.

Both parties have engaged reputable legal and financial advisers to navigate the complex regulatory landscape and ensure compliance throughout the process.