New bid challenges existing Iris Cairns offer, prompting strategic review by the Board
Competing Offer Raises Stakes in Cairns Casino Acquisition
The Australian casino landscape faces a new twist as Morris Group, through its subsidiary MGGM Cairns No1 Pty Ltd, has submitted an unsolicited takeover proposal to acquire all issued units of Reef Casino Trust (RCT) for AU$3.70 (US$2.47) per unit, valuing the deal at approximately AU$184 million.
This offer directly challenges an existing takeover bid from Iris Cairns Property Pty Ltd, which had already signed a Takeover Bid Implementation Agreement with RCT earlier this month. The Morris proposal mirrors the price offered by Iris but extends beyond by including the purchase of Casinos Austria International (Cairns) Pty Ltd and Reef Corporate Services Limited (RCSL), the trust’s responsible entity.
Conditional Nature and Board Evaluation
Unlike the Iris offer, the Morris Group bid remains non-binding and conditional, contingent on successful negotiations and the execution of share purchase agreements. The Independent Board Committee (IBC) of RCSL is currently assessing the new proposal with the assistance of financial and legal advisors.
Due to existing obligations under the agreement with Iris, the Board must carefully evaluate whether the Morris Group offer represents a “superior proposal” as defined in takeover regulations. Notably, Iris retains the right to match any competing bid, which adds complexity to the ongoing evaluation process.
Regulatory Considerations and Market Dynamics
The transaction is subject to multiple regulatory approvals, including gaming and foreign investment clearances, and must also be confirmed by an Independent Expert’s report. These factors will significantly influence the feasibility and timing of any deal.
The situation highlights increasing investor interest in the Australian casino sector, particularly in regional properties like The Reef Hotel Casino, which remains a valuable asset in North Queensland’s tourism and entertainment market.
Outlook: Board Urges Caution for Unitholders
For now, RCSL has advised unitholders to take no action as both proposals are under review. The Board continues to recommend the Iris bid, pending further developments and the emergence of a confirmed superior offer.
As the bidding war intensifies, stakeholders are closely watching whether Morris Group will formalize its proposal or whether Iris will strengthen its existing terms. The final decision could reshape ownership dynamics in Cairns’ flagship casino asset, impacting both local operations and broader industry consolidation trends.
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