Sam Arnaout’s Iris Capital has struck a deal to purchase Casino Canberra for $63 million, outbidding a rival pub group by $5 million.
In a note to its shareholders the vendor, Canberra-based Aquis Entertainment, said it has signed a new share purchase agreement with Sydney-based Iris Capital after it had upped its previous bid of $60 million, made a week ago.
Aquis said it had been drawn to Iris Capital’s proposal, ahead of a rival $58 million bid by pub and hotel operator Oscars Hotel Group— led by brothers Mario and Bill Gravanis, due to its inclusion of a $1 million break fee.
The sale of Casino Canberra, conditional on shareholder and regulator approval, comes after Aquis failed to reach an agreement with the ACT government over a proposed $330 million redevelopment of the property.
Aquis Entertainment chief executive Allison Gallaugher said the group was considering using the proceeds from the transaction to repay some or all of the convertible loan between the company and its major shareholder as well as the possibility of a shareholder dividend or distribution.
“The board of Aquis is undertaking a review as to the best use of the sale proceeds, including assessing alternative business opportunities, repayment of debt and a potential distribution of funds to shareholders,” Gallaugher said.
For Aquis, the deal marks a significant windfall on a property the group purchased in 2014 for just $6.5 million and has been trying to sell since 2018, when it was listed for $32 million.
Acquis had been attempting to redevelop the casino, submitting plans in 2015 that included a request for permission to install up to 500 slot machines, but hit hurdles when plans were rejected in 2018.
The deal marks the second significant acquisition by Iris Capital in the casino sector after purchasing the Lasseters Hotel Casino in Alice Springs at the beginning of 2021.
Iris Capital, which owns more than 30 pubs and 20 hotels, bought the casino from Singapore-based Lasseters International Holdings for $105 million, propelling the property group to the position of the largest employer in the Northern Territory’s second-largest town.
The asset is a 4.5-star hotel resort with 205 rooms operated by the InterContinental Hotel Group.
Arnaout plans to spend $70 million on a new 230-room hotel as well as other upgrades at the casino precinct.
Iris Capital also recently acquired three pubs and two stand alone accommodation hotels in Alice Springs; Gap Tavern, Todd Tavern, Diplomat Hotel, Mercure Hotel and Aurora Hotel.
“In addition to our Casino and Crown Plaza accommodation operation, these assets provide high quality hospitality experience we are determined to deliver our clients in the Northern Territory,” Arnaout said.
Iris Capital is also undertaking the biggest apartment development in Newcastle’s history and is even standing out in the developer-soaked Gold Coast, where his $800 million redevelopment of the 1980s-era Niecon Plaza—the most valuable project on Broadbeach in 13 years.
The developer also has plans for another 38-storey Broadbeach tower, planned for a narrow 900sq m site at 73 Garfield Terrace.
