Donaco’s Q3 Dip Meets A$0.045 Share Buyout Bid at 54% Premium

Q3 Financial Overview

Donaco International Limited has released its Q3 FY2025 results, revealing a slight downturn in group net revenue and EBITDA compared to the previous quarter. The company reported net revenue of A$10.03 million, down from A$10.90 million in the December quarter, while EBITDA decreased to A$4.10 million from A$5.77 million. Despite these declines, visitation across Donaco’s operations remained steady, buoyed by easing border restrictions and regional tourism initiatives.

The Star Vegas casino in Cambodia experienced a notable dip, with net revenue falling to A$6.28 million from A$7.17 million and property-level EBITDA dropping to A$3.48 million from A$4.22 million. Average daily visitation also declined marginally to 928 players. Conversely, Aristo International Hotel in Vietnam demonstrated resilience, posting stable revenue of A$3.75 million and consistent EBITDA of A$2.31 million, alongside a 12% increase in daily visitation to 336 players.

Strengthened Cash Position Amid Operational Challenges

Donaco’s cash reserves improved to A$39.98 million by the end of March 2025, up from A$36.26 million in the prior quarter. This enhanced liquidity provides a buffer as the company navigates a challenging operating environment marked by regulatory uncertainties and regional geopolitical factors. Payments to related parties, including directors, amounted to A$202,000 during the quarter, reflecting ongoing corporate governance transparency.

Strategic Acquisition Proposal

In a significant corporate development, Donaco entered into a Scheme Implementation Deed with On Nut Road Limited for the proposed acquisition of all remaining shares at A$0.045 per share. This offer represents a compelling 54.10% premium to the 90-day volume-weighted average price, valuing Donaco at approximately A$55.59 million on a fully diluted basis. The Donaco Board has unanimously recommended shareholders vote in favor of the Scheme, contingent on the absence of a superior proposal and a positive independent expert opinion.

The acquisition offer provides shareholders with a certain cash exit, mitigating risks inherent in the cyclical gaming industry and addressing fundraising challenges that have constrained Donaco’s growth prospects. The Scheme Meeting is anticipated in June 2025, with a detailed Scheme Booklet and Independent Expert’s Report to be distributed in May.

Regulatory Environment and Future Outlook

Donaco continues to monitor the Thai Government’s proposed Entertainment Complex Business Act, which could legalize gambling within Thailand’s entertainment complexes. While this legislation is not yet in effect, its passage could materially impact Star Vegas operations by altering cross-border tourism dynamics and increasing competition. The company is also contending with operational cost pressures, including power cuts along the Thailand-Cambodia border.

Despite these headwinds, Donaco’s steady visitation figures and improved cash position provide some operational stability. The unfolding regulatory landscape and the outcome of the acquisition proposal will be pivotal in shaping Donaco’s strategic direction and market positioning in the coming months.