Why Iris’s $3.87 Cash Bid for Reef Casino Trust Has Unanimous Board Support

Background and Offer Details

Iris Cairns Property Pty Ltd, acting as trustee for the Iris Cairns Property Trust, has formally lodged its bidder’s statement for an off-market takeover bid to acquire all units in Reef Casino Trust (RCT) at a cash price of $3.87 per unit. This offer represents a substantial premium to RCT’s trading prices prior to the bid announcement, with a 28.15% premium to the closing price on 11 July 2025 and a 43.80% premium to the three-month volume weighted average price.

The offer is unanimously recommended by the independent board committee and all directors of Reef Corporate Services Limited, the responsible entity of RCT, subject to no superior proposal emerging and the independent expert providing a reasonable opinion. Notably, RCT’s two largest unitholders, Casinos Austria International Limited and Accor Casino Investments (Australia) Pty Ltd, collectively holding over 70% of units, have publicly stated their intention to accept the offer.

Strategic and Financial Implications

The total cash consideration for the acquisition of all issued units is approximately $193 million, with an additional $44 million earmarked for acquiring shares in RCT’s responsible entity and casino operator. Iris has secured binding equity commitments and may supplement funding with debt financing, ensuring the offer is not subject to financing conditions.

Accepting the offer provides RCT unitholders with certain cash value and removes exposure to market volatility and sector-specific risks inherent in the gaming and hospitality industries. The offer also addresses the historically low liquidity of RCT units on the ASX, offering a straightforward exit at a premium price without brokerage or stamp duty costs.

Regulatory and Operational Outlook

The offer remains conditional on a series of regulatory approvals, including Queensland gaming and liquor licenses, ministerial consents, and compliance with the Casino Control Act. Iris anticipates these approvals will take several months, with the offer period closing on 13 March 2026 unless extended.

Post-acquisition, Iris intends to maintain the Reef Hotel Casino as a standalone regional casino and hotel, subject to a strategic and financial review. Potential operational changes include renovations, reassessment of sublease agreements, and possible rebranding of hotel facilities. Iris also plans to retain current employment arrangements initially, with any future changes to be carefully considered.

Governance and Future Control

If Iris acquires 90% or more of RCT units, it intends to compulsorily acquire remaining units, delist RCT from the ASX, and replace the current board with its nominees. If control is below this threshold but above 50%, Iris plans to secure board majority representation and may pursue delisting within 12 months. These governance changes underscore Iris’s commitment to integrating RCT within its broader hospitality portfolio.

The offer’s unanimous board recommendation, major unitholder support, and substantial premium position Iris’s bid as the leading proposal for RCT. However, the outcome hinges on regulatory approvals and the independent expert’s final opinion, with no superior proposals currently on the table.