Business
30 May, 2025
Business as usual
THE Reef Hotel Casino in Cairns is operating as normal as two independent directors weigh up two separate takeover bids for the central city gaming business and property.
Reef Casino Trust chairwoman Wendy Morris and Abigail Cheadle were appointed by the board to consider the proposals by Iris Hotel Group in February and a second from the Morris Group last month.
Last Friday’s annual meeting was told that Iris submitted “a confidential, non-binding and highly conditional proposal” to acquire all of the trust’s units, which included Reef Corporate Services Ltd (the owner of the casino and hotel properties) and Casinos Austria International (Cairns) Pty Ltd (the operator of the hotel-casino) on February 26 with a similar offer from the Morris Group on April 30.
“Discussions remain confidential and incomplete,” Ms Morris told the meeting of about 25 unitholders.
“At this time, there remains no certainty that the discussions will lead to a transaction, nor as to the terms and conditions (including price) of any such transaction (if agreed),” she said.
“However, you can rest assured the independent board committee will use its best endeavours to seek to achieve the most successful outcome for all unitholders.
“We will continue to keep the market informed in accordance with our continuous disclosure requirements.”
Ms Morris was unable to elaborate further when questioned by Cairns Local News.
Ms Morris said she could not to comment on the prices offered by the two parties nor the status of discussions with either bidders.
In a statement to the ASX, trust chief executive officer Brad Sheahon said the estimated distributable profit for the first half of this year was down on the same period of last year, between $3.2 million and $3.8m ($4.336m in 2024).
He said, while the trust was trading profitably with revenues comparable to the first half of 2024, hotel-casino costs were primarily higher due to ongoing regulatory and compliance costs. Trust expenses were also higher due to the costs associated with the two takeover bids.
Ms Morris told the meeting that the 2024 revenues of $25.5m were lower than 2023 ($26.3m). Total revenues were higher than 2023 due to strong local and domestic patronage, however, higher costs, primarily payroll and regulatory-related expenses, resulted in slightly lower rentals to the trust than in 2023.
Mr Sheahon said that, although international tourism had not quite recovered to pre-pandemic levels, the local and domestic markets had returned to the complex, with overall numbers to the complex rising in 2024.
The two bidders for The Reef Hotel Casino are both casino and hotel operators.
It has been suggested their bids for the business and property are more than $200 million each. The trust’s current market capitalisation is $151.9m and shares were last trading at $3.05 after a high of $3.63 in March.
The Morris Group is owned by billionaire Chris Morris, a co-founder of Computershare, who also owns The Ville resort-casino and the Ardo five-star hotel in Townsville, as well as luxury lodges and a fleet of helicopters and superyachts.
Iris, operated by rich lister Sam Arnaout, owns the Canberra and Alice Springs casinos, as well as 13 hotels, mostly in Sydney.
