It was a deal that had been in the works for over a year. Blue Whale Entertainment and Aquis Entertainment Limited set down at the negotiating table at the end of 2018 to discuss the possibility of an acquisition and Aquis was more than amenable to the idea of giving up its business. The decision followed the failure of Aquis to redevelop its Casino Canberra, and everything seemed to be on track. That is, until regulators with the Australian Capital Territory (ACT) Gambling and Racing Commission seemed to be less than enthused with the sale. As a result, Aquis has decided to pull the deal off the table and explore new options.
A year went by without much movement by ACT, and the deadline to consummate the acquisition, December 22, came and went. There was talk about a possible request for an extension of the sales agreement as a result of the regulator’s lack of input, but Aquis now reports that the two companies were not able to reach a viable alternative and it was forced to scrap the plans.
In a filing with the Australian Securities Exchange (ASX), where Aquis is listed, the company stated, “Aquis and Aquis Canberra Holdings (Aus) Pty Ltd have issued a notice of termination to Blue Whale. Termination of the transaction documents will become effective on 6 February 2020… Following termination of the sale transaction, the board will update the group’s strategies to ensure continual improvement and growth in the business, including consideration of any new business opportunities which may arise.”
Aquis apparently doesn’t believe the failure to receive approval lies with its operations. It adds in the ASX filing that, with the deal now officially dead, it is working with Blue Whale to receive the AU$280,000 (US$189,000) “break fee” payment that was stipulated in the initial contract.
Aquis, controlled by businessman Tony Fung, had wanted to inject $330 million ($222.75 million) into renovating Casino Canberra, and had presented his proposal to regulators. It was to include an updated casino, two new hotels, shopping and dining facilities and more. Fung was ready to go with the project, but the government decided to slash the number of slot machines that would be allowed while holding him to his investment budget.
With a reduction in revenue possibly coming, Aquis was forced to reconsider the viability of the project; however, confidence in the company’s future remains high. The ASX filing asserts, “Aquis is proud of the improvements made to the business since taking control of the group and intends to continue on this path. The business is viable, cash positive and the Board looks forward to seeing further improvements in the future.”
