Donaco International stockholders have approved a buyout of the Asian casino operator by a Hong Kong-based investment fund, On Nut Road.
A majority of Donaco International shareholders have voted in favour of a 100% buyout offer from On Nut Road. ONR is a special purpose vehicle and a unit of Hong Kong-licensed Argyle Street Management, with more than AU$3.07 billion (US$2 billion) in managed assets. It has been a Donaco investor since 2019 and currently holds a 12.84% share of issued capital.
Australia-listed Donaco owns two casinos in Southeast Asia: DNA Star Vegas in Cambodia and the Aristo International Hotel in Vietnam. It announced the proposed acquisition on 17 March, when ONR offered AU$0.045 cash per share. At the time, Porntat Amatavivadhana, Donaco’s non-executive chairman, cited “financial headwinds” including “limited profit margins and a lack of substantial investor confidence”. These factors “made fundraising efforts for any form of growth particularly challenging”.
Those challenges heightened with recent tensions between Cambodia and Thailand. The conflict, which closed the borders to most travel, affected business at Star Vegas, which primarily serves Thai patrons. In June, Donaco posted a 62% drop in casino traffic at the Poipet property.
Company-wide, Donaco saw a 57% drop in EBITDA in the second quarter, with Star Vegas revenues dropping to AU$4.31 million. Aristo revenues were up 4.7%, but it was too little to offset the freefall in Cambodia.
Global law firm Ashurst advised Donaco on the proposed acquisition. It said the offer represents “a significant premium to Donaco’s undisturbed share price” and a chance for shareholders to de-risk their investment.
“The offer represents a 50% premium for Donaco shareholders based on recent trading prices,” said partner Murray Wheater. “The scheme has been unanimously recommended by the Donaco board.”
In a 1 August filing to the Australian Securities Exchange, Donaco said 98.11% of shareholders also approved of the acquisition. For the deal to be completed, the Supreme Court of New South Wales must sign off on it in a hearing on Thursday. If all conditions are met, trading in Donaco shares would end the next day, and the company would go private by 19 August.
