Australian integrated resort developer and operator Aquis Entertainment has signed a share purchase agreement with Capital Leisure & Entertainment, a subsidiary of New South Wales hospitality business Oscars Group, for the sale of 100% of its shares in Aquis Canberra for AUD 52 million ($36 million).
The sale would see Oscars Group acquire 100% of shares in Casino Canberry Ltd., which holds the license to operate Casino Canberra. The sale is conditional on Aquis shareholder approval and ACT casino liquor and licensing regulatory approvals.
The AUD 52 million ($36 million) is on a debt and cash-free basis with the only requirement that Aquis Canberra must be transferred at least AUD 3 million ($2.1 million) in cash to meet certain casino regulatory requirements. Completion is expected to occur by the end of the third quarter of 2022.
Allison Gallaugher, CEO of Aquis and Casino Canberra, said: “The transaction provides considerable value to the company and its shareholders. It recognizes the attractive operating performance of the business which has continued to trade well since reopening post the Covid-19 lockdowns. As an employee of Casino Canberra, I am also very excited about the future and working with Oscars on the continual improvement of our business.”
Mario Gravanis, Director of Oscars Group, commented: “We are excited by the opportunity to acquire the Casino Canberra business. We will be working closely with Aquis over the coming months to satisfy the necessary conditions precedent with minimal disruption to the business and look forward to working with the Casino Canberra team in the future.”
Aquis will use the money from the sale to assess alternative business opportunities, repay debt and repay some or all of the convertible loan between Aquis and Aquis Canberra which currently has a balance of $33 million ($22.8 million).
The sale of Casino Canberra comes after Aquis failed to reach an agreement with the Australian Capital Territory Government over a proposed AUD 330 million (USD 226 million) redevelopment of the property.
Aquis, which purchased Casino Canberra in 2014, submitted its original redevelopment plans in 2015 including a request for permission to install up to 500 slot machines: Casino Canberra is not permitted to operate slot machines under current legislation.
However, the company’s initial bid was rejected in December 2018, with the government describing the proposal as untenable due to ongoing uncertainty surrounding regulation and financing details.
Instead, the ACT government issued a counteroffer under which Aquis would be permitted to run 200 slot machines and 60 EGMs subject to certain strict conditions. Aquis rejected the reduced offer.