Iris Capital purchases Casino Canberra from Aquis

By Mia Chapman Updated
Iris Capital purchases Casino Canberra from Aquis

Aquis Entertainment has accepted a $63 million bid for Casino Canberra from development and hospitality group Iris Capital.

The Australian Financial Review reports that rich lister Sam Arnaout has outbid veteran Sydney hoteliers the Gravanis brothers to acquire the company.

Aquis, which is majority-owned by Hong Kong billionaire racehorse owner Tony Fung said it had accepted a revised offer from Mr Arnaout’s Iris Capital for all the shares in the Aquis subsidiary that owns and operates the casino.

The Irish Capital offer followed a bidding war with Bill and Mario Gravanis’ Oscars Hotels, which increased its original and accepted May offer of $52 million to $58.2 million in early July in the hope of sealing the deal.

Iris Capital subsequently raised its offer to $60 million and then $63 million to secure the casino property and operating business, which has been struggling under the weight of a $33 million loan from Mr Fung after its revenues were hit by COVID-19 lockdowns and trading restrictions.

The Canberra casino deal takes Iris Capital’s investment in new hospitality assets in July to about $220 million after it bought the Strathfield Hotel in Sydney for about $80 million and five properties in Alice Springs, three pubs and two accommodation hotels for a combined $75 million.

It is also spending $100 million on revamping Alice Springs’ Lasseters Hotel Casino, including adding a new hotel to the property it paid $105 million for last year.

“We are excited about the opportunity to acquire Casino Canberra and look forward to working collaboratively with the Aquis team in the future,” Mr Arnaout said.

The sale of the casino is subject to approval by Mr Fung’s Aquis Canberra Holdings, which owns 88.5 per cent of Aquis and casino and liquor licence regulatory approvals.

Should a superior offer be made, Iris Capital has an agreement with Aquis to have the opportunity to provide a counter-offer.

Iris is also entitled to a $1 million break fee should its deal not proceed.

Aquis value impacted by lack of pokies

The sudden escalation of bids for Aquis was unexpected because it has been trying to shift the casino for some time.

The property’s value is impacted because it is the only Australian casino without poker machines.

Aquis lobbied the Australian Capital Territory government for 500 poker machines soon after it acquired the casino.

In return for the proposed concession, it promised it would spend $307 million into regenerating the property, which it said had suffered from “years of underinvestment”.

Ultimately, the two parties failed to reach an agreement.

This is despite the ACT Government allowing the casino to run 200 poker machines and 60 electronic gaming machines subject to certain strict conditions, which Aquis baulked at.

Fung first came to public attention in Australia almost a decade ago with a controversial proposal to build an $8 billion megaresort in Cairns, close to the Great Barrier Reef.

To the delight of environmental campaigners, that project appears to have been abandoned.

In 2018, Casino Canbera was to be sold to Blue Whale Entertainment, but the company’s founder failed regulatory checks.

In 2020, that same individual, Michael Gu, became an international fugitive when his Sydney-based property group, iProsperity collapsed. It owed investors around US$245 million and his whereabouts are unknown.

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