Fancy a 20% gain in 6 months?

If this acquisition goes ahead, investors could see a big return

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Here's a potential idea to make a 20% return on your money within the next six months. That's the equivalent of a 40% annualised return, which would handsomely thrash the returns available from any asset.

Mind you, the investment is not with risk. In fact, it's fairly high risk, so investors need to be prepared for the potential downside. Given the potential returns, this may be an attractive 'speculative' investment.

As Foolish investors will know, the speculative portion of a portfolio is the 'splash' at the top of our Motley Fool Share Advisor portfolio allocation pyramid.

Back in mid-November, we highlighted why Reef Casino Trust's (ASX: RCT) shares soared more than 40% to around $4.00, after receiving a takeover offer from Aquis Casino Acquisitions. Aquis is a company associated with Hong Kong billionaire Tony Fung. But since that time a lack of news has seen investors bail out of the company, pushing the shares down to $3.62 at Friday's close. That's a marked difference when compared to the offer price of $4.354 –a whole 73 cents, or 20%.

It seems investors are either sceptical that the takeover will proceed, or have just become bored with the lack of news, and therein lies the opportunity. Just because there's no news, doesn't necessarily mean that the takeover is off the table.

The deal requires the approval of the current owners, the Queensland and Australian Capital Territory (ACT) governments, as well as various regulatory authorities. So there is potential for at least one of those authorities to knock the scheme back. Approvals also take time. Additionally, Aquis is undertaking due diligence to ensure there's no nasty surprises in the books – another risk that could see the deal fallover, or Aquis potentially lower its offer price.

Should the deal fallover, shares could fall back to the pre-offer price of around $2.80 or even lower.

But the downside may be limited, with the Trust holding net tangible assets of around $2.00, and paying a dividend of 5.5% at current prices. Should the price fall back to $2.80, the prospective dividend yield would likely rise to around 7.1%. Additionally, Casinos Austria and its partner in Reef Corporate Services, Accor Group, who collectively hold more than 70% of the units in Reef Casino Trust, have indicated that they would support the proposal if it proceeds.

Another positive note is that the Queensland government appears to support the takeover, in an effort to increase its revenues. Crown Resorts (ASX: CWN) and Echo Entertainment (ASX: EGP) are both been wooed to potentially open up new casinos in the state, while Aquis is planning a $4.2 billion floating casino in Cairns, which could attract thousands of additional tourists to the region as well as VIP gamblers.

Foolish takeaway

The various regulatory and government decisions should be made within the next six months. Due diligence should be completed within the next month or too. Should the deal go ahead, investors could see a return of more than 20%, but need to be well aware of the risks they are taking should it fall through.

Motley Fool writer/analyst Mike King doesn't own shares in any company mentioned. You can follow Mike on Twitter @TMFKinga

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