On Nut Road to Acquire Donaco International in Cash Deal
Donaco International Ltd, a casino operator with properties on the Cambodia and Vietnam borders, has announced a binding agreement with one of its investors, a Hong Kong-based investment fund, for a complete buyout of the company’s shares.
LISTEN TO THIS ARTICLE:In a filing to the Australian Securities Exchange (ASX) on Monday, Donaco confirmed that it had entered into a binding scheme implementation deed with On Nut Road Ltd, under which the latter will acquire 100% of Donaco’s remaining shares via a scheme of arrangement. The agreed cash offer is AUD 0.045 per share, which represents a 50% premium over the closing price of AUD 0.030 on the previous Friday.
On Nut Road Ltd is a special purpose vehicle managed by Argyle Street Management Ltd, a Hong Kong-based fund manager with over US$2 billion in assets under management. According to the filing, On Nut Road has been an investor in Donaco since 2019 and currently holds 12.84% of the company’s issued capital.
The proposed acquisition values Donaco’s fully diluted equity at approximately AUD 55.59 million.
Related: Cambodia to Tighten Casino Regulatory Oversight
Board and Shareholder Support for the Deal
Donaco’s board has unanimously recommended that shareholders approve the deal. For it to move forward, the deal must be approved by Donaco’s shareholders at a meeting scheduled for June 3, followed by court approval. If no delays occur, the acquisition could be finalized by June 18.
Additionally, Donaco’s largest shareholders, Lee Bug Huy and Lee Bug Tong, who collectively own 42.17% of the company’s issued capital, have expressed their intention to vote in favor of the proposal.
For the period from July to December 2024, Donaco reported net revenue of AUD 21.8 million, which is a 12.2% increase from the previous year. Group-wide EBITDA reached AUD 11.4 million, representing a 17% year-on-year increase.
The company’s flagship DNA Star Vegas resort in Poipet, Cambodia, recorded a 5.7% rise in property EBITDA, reaching AUD 8.1 million. Donaco also operates the Aristo International Hotel in Lao Cai, Vietnam, near the Chinese border.
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Chairman Fully Backs Deal
Porntat Amatavivadhana, Donaco’s non-executive chairman, said that On Nut Road’s offer provides significant value for shareholders, offering a 54.10% premium over the 90-day volume-weighted average share price.
He noted that while Donaco has maintained stable performance, the company has faced financial difficulties due to limited profit margins and a lack of investor confidence and said that these challenges have made it difficult to secure funding for future growth.
Amatavivadhana also pointed to potential risks from Thailand’s possible legalization of casino gambling, which could impact visitor traffic to Donaco’s border-based casinos. Additionally, he cited recent power supply disruptions along the Thailand-Cambodia border as an operational challenge.
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