Regulatory Hurdles Ahead as Iris Pursues Full Control of Reef Casino Trust

Iris Capital’s Strategic Move

In a decisive move within the Australian hospitality and gaming sector, Iris Cairns Property Pty Ltd, acting as trustee for the Iris Cairns Property Trust, has initiated an off-market takeover bid for Reef Casino Trust (RCT). The offer values each RCT unit at $3.87 in cash, marking a substantial premium to recent trading prices and signaling Iris’s intent to consolidate its presence in the regional casino and hotel market.

The bid, officially opened on 12 September 2025, is set to close on 13 March 2026, unless extended. It comes with the unanimous endorsement of RCT’s independent board committee and directors, contingent on the absence of a superior proposal and a favorable opinion from an independent expert.

Premium Offer and Unitholder Support

The offer price represents a premium exceeding 40% compared to RCT’s unit prices before the bid announcement, reflecting a compelling value proposition for unitholders. Notably, the two largest unitholders, Casinos Austria International Limited and Accor Casino Investments, collectively controlling over 71% of RCT units, have publicly committed to accept the offer within 21 days of the offer period opening, provided no superior proposal emerges.

This strong backing from major stakeholders underscores the market confidence in Iris’s bid and reduces uncertainty for minority unitholders considering their options.

Regulatory and Transactional Conditions

The takeover is subject to a series of regulatory approvals, including Queensland gaming and liquor licensing consents, as well as compliance with the Casino Control Act and related agreements. Iris has secured sufficient funding through a binding equity commitment and potential debt financing to cover the maximum consideration amount, estimated at approximately $236.6 million when including acquisitions of related entities.

These conditions, alongside a minimum acceptance threshold of 80%, ensure that the transaction proceeds with regulatory and shareholder alignment, although they also introduce potential delays and uncertainties.

Post-Acquisition Intentions and Market Implications

Should Iris acquire 90% or more of RCT units, it intends to compulsorily acquire remaining units, delist RCT from the ASX, and conduct a comprehensive strategic and operational review of the Reef Hotel Casino complex. This review may lead to renovations, potential rebranding, and adjustments to existing agreements, with a cautious approach to distributions given anticipated capital investments.

For unitholders who do not accept the offer, the prospect of reduced liquidity and potential share price decline looms, as the market adjusts to the new ownership structure and strategic direction.

How Unitholders Can Respond

RCT unitholders are encouraged to carefully review the bidder’s statement and consider the offer’s terms. Acceptance can be made online via the Automic Investor Portal or through paper acceptance forms, with clear instructions provided. The offer includes no brokerage or stamp duty costs for unitholders accepting directly, enhancing its attractiveness.

As the offer period progresses, market participants will watch closely for acceptance levels, regulatory developments, and any competing proposals that may arise.