Just 9 months since billionaire investor Tony Fung stood down as the Chairman of Aquis Entertainment (ASX: AQS), the company is packing up via the sale of Canberra Casino as the business has continued to struggle without the stewardship of Fung, their largest shareholder.
Well known for his massive investment across Australia over the past decade under his Aquis banner, Fung stood down as Chairman and non-Executive Director of Aquis Entertainment in August 2021 citing the Company’s need for independence. He effectively read the play amid controversy brought upon by rival Crown Resorts (ASX: CWN) which saw regulators force Crown to sever ties with Packer amid a very costly Royal Commission.
For Fung, the move won’t make much of a difference for him given his global investment empire, including a multi-billion dollar investment in Australian horse racing under the Aquis Farm banner, but it’s going to be a missed opportunity for Canberra.
Acquiring Canberra Casino in 2014, Aquis had plans to develop the fledgling casino to rival its capital city counterparts with a $307 million development. What would have been a boon for the local economy however, continued to hit regulator roadblocks, ironically in the nation’s capital.
With Fung no longer involved in the business, Canberra Casino and its casino licence is now set to be sold to the Oscars Group for $52 million. It’s a pretty big win for Fung, the 90% shareholder of AQS, with Aquis having only paid $6.5 million for the business 8 years ago.
“The Transaction provides considerable value to the Company and its shareholders. It recognises the attractive operating performance of the business which has continued to trade well since reopening post the Covid-19 lockdowns,” said Casino Canberra CEO, Allison Gallaugher.
“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.”
Given the Casino is the primary business asset of Aquis Entertainment, the sale will be subject to shareholder and regulatory approval.
Sale proceeds will be used to pay off a $33m loan to Aquis Canberra Holdings Pty Ltd while the Company seeks other business opportunities in Australia. Should they not be found, the Company would likely return a dividend to shareholders.
Although unlikely at this stage, the move would potentially raise the opportunity for Aquis Farm to be controlled by a listed entity as a sports organisation to become listed on the ASX in the same vein as the Brisbane Broncos (ASX: BBL).
Unlike the Broncos however, Aquis Farm is one of the biggest players in its code with Fung racing hundreds of racehorses around the country, and standing 17 stallions throughout Queensland, New South Wales and Victoria – headlined by Pierata whose service fee was this week announced at $44,000.
For the 12 months ended 31 December 2021, Aquis Entertainment reported $25.1m in revenue, a 33% increase from the previous year, to deliver $231k net profit after tax.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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