Reef Casino Trust’s Higher Offer Raises Stakes Amid Regulatory Hurdles
Reef Casino Trust and Iris Cairns Property Pty Ltd have agreed to increase the takeover bid price to $3.87 per unit, boosting the total offer value to approximately A$192.7 million. The unanimous board recommendation and major unitholder support underscore the deal’s momentum amid regulatory conditions.
- Offer price increased from $3.72 to $3.87 per unit
- Total equity valuation rises to approximately A$192.7 million
- Break fee adjusted to $1.927 million reflecting higher offer price
- Unanimous recommendation by Reef Casino Trust board and Independent Board Committee
- Major unitholders Accor and Casinos Austria International backing the offer
Background to the Revised Takeover Bid
Reef Casino Trust (RCT), the owner and manager of The Reef Hotel Casino in Cairns, has announced a significant update to its ongoing takeover bid with Iris Cairns Property Pty Ltd. Following negotiations, Iris has increased its offer price from $3.72 to $3.87 per unit, raising the total consideration to approximately A$192.7 million for all 49.8 million units on issue.
This adjustment follows the initial agreement announced in July 2025 and a prior amendment in August, reflecting Iris’s commitment to securing control of RCT under more attractive terms for unitholders.
Key Terms and Conditions
The revised agreement includes an increased break fee of just under $1.93 million, designed to compensate either party should the transaction fail under specified circumstances. The offer remains an off-market cash bid, subject to an 80% minimum acceptance condition and various regulatory approvals, including casino and liquor licensing from Queensland authorities.
Importantly, the Independent Board Committee (IBC) of RCT has unanimously recommended that unitholders accept the offer, contingent on no superior proposal emerging and the Independent Expert providing a Reasonable Opinion on the fairness and reasonableness of the bid. The IBC’s endorsement signals strong confidence in the value proposition presented by Iris.
Support from Major Unitholders
Two of RCT’s largest unitholders, Accor and Casinos Austria International, who collectively hold over 71% of units, have publicly confirmed their intention to accept the offer. Their backing is a critical factor in the bid’s prospects, as it substantially increases the likelihood of reaching the required acceptance threshold.
These major stakeholders have also committed not to exercise withdrawal rights should the offer period be extended due to regulatory delays, provided no superior proposal arises and the Independent Expert maintains a positive opinion.
Valuation and Market Premium
The new offer price represents a 4.31% premium to the closing unit price on 27 August 2025 and a substantial premium of over 40% compared to prices before the initial proposal was announced in February 2025. This premium underscores the value enhancement for unitholders relative to recent trading levels.
Given the premium and the unanimous board recommendation, the offer presents a compelling opportunity for unitholders to realise value in a relatively illiquid asset.
Next Steps and Regulatory Outlook
The lodgement of the Bidder’s Statement with ASIC has been rescheduled to 29 August 2025, with the Target’s Statement, including the Independent Expert’s report, expected to be dispatched around 29 September 2025. These documents will provide further detail on the offer’s terms and the expert’s assessment.
RCT and Iris will continue to work towards satisfying the regulatory conditions, including gaming and liquor licensing approvals, which remain key milestones before the offer can be declared unconditional.
Investors should watch closely for any competing proposals, regulatory developments, and the Independent Expert’s final opinion, which will heavily influence the ultimate outcome of this transaction.
Bottom Line?
With the offer price now elevated and major unitholder support secured, the next few weeks will be critical as regulatory approvals and expert assessments shape the future ownership of Reef Casino Trust.
Questions in the middle?
- Will any superior proposals emerge to challenge Iris’s increased offer?
- How will the Independent Expert assess the fairness and reasonableness of the revised bid?
- What is the timeline and likelihood for obtaining the necessary casino and liquor licensing approvals?