Casino Canberra is to change its ownership following a deal with a company which is currently owned and controlled by one of the most successful hotel owners in Australia, Michael Gu. The transaction is estimated to AU$32 million.
Tony Fung’s Aquis acquired Casino Canberra from Casinos Austria in 2014 at the price of AU$6.5 million. Now, the Hong Kong billionaire has decided to sell his majority stake to Blue Whale Entertainment in a complex deal involving a cash component, a loan payoff, as well as a 3-year transition period for purchasing the remaining shares in Casino Canberra.
The deal signed between the companies includes a cash component of $4 million, plus the buyer paying $24 million of the $37-million debt which Aquis owns to Mr. Fung. A certain portion of the debt is being forgiven. As mentioned above, there will also be a three-year transition period, after which the rest of Mr. Fung’s shares in the operator will be purchased by Blue Whale Entertainment, leaving it with a total stake of 87%.
For the time being, Fung owns a little under 90% of Aquis’ shares. The sale to Blue Whale Entertainment would need shareholder approval, with full details about the deal being set to be presented to the casino shareholders in January 2019 to consider for their meeting scheduled for the beginning of March.
New Casino Canberra Owner Will Have to Get Operating License from ACT Government
The owner of Blue Whale Entertainment, Mr. Gu, does not own a casino operating licence, so he will have to get the approval of the ACT Government. In a statement to the Australian Stock Exchange, an official representative of his confirmed that he has no other interests in casino gambling, explaining that the casino acquisition deal would set the business controlled by Blue Whale Entertainment into the right direction.
After the completion of the deal, Blue Whale Entertainment plans to upgrade the casino, including the introduction of “new world-class restaurants”. The spokesperson of Mr. Gu further shared that the company is hoping to create a new entertainment hub in Australia’s capital city and provide local residents with first-class experiences, which would attract more visitors to Canberra.
A spokesperson of ACT Gaming Minister Gordon Ramsay explained that no meeting had been held so far between the Minister and the companies’ representatives in terms of the casino license acquisition.
As mentioned above, for the time being, Mr. Gu does not have a casino operating license. Under existing gambling legislation, anyone who is interested in buying a casino venue must be first assessed by local regulators, before they get ministerial approval of the sale. In case that it comes to a corporation, the assessment process is extended to each Executive Officer in the entity.
Previously, Tony Fung-owned Aquis has revealed to the stock exchange that it has been engaging in a confidential bidding process. The company has been facing some difficulties due to its inability to go on with the AU$330-million redevelopment which it announced in late 2015. Mr. Fung’s plans for brand retail, swank hotels, a new entrance on to Glebe Park failed during the lengthy unsolicited bids of the ACT Government, in a shaky gambling business environment.
Casino Canberra got the ACT Government’s agreement to establish 200 poker machines in its gambling floor. The authorities, however, decided to impose new bet limits on the gambling operator, as well as new taxes on the machines, and eventually, no final deal was reached.
- Author
Olivia Cole
