Bally's Steps In to Save Star Entertainment Group
A Fresh Deal for an Ailing Casino Giant
Potential Acquisition of Star by Bally's for $158 million Approved by Major Shareholder
Star Entertainment Group, Australia's casino titan, has hit a rough patch for a few years now. The company's faced intense scrutiny from government investigations, leading to hefty fines and revocation of its Sydney casino license in 2022. But now, there's a glimmer of hope, thanks to Bally's Corporation.
Bally's made a bold move this month, offering a substantial stake in Star at an estimated AU$250 million (US$158 million). And this week, things got even more enticing. Star's largest shareholder, Bruce Mathieson, known for his empire in pubs and slot machines, has thrown his support behind the Bally's deal, adding an extra AU$50 million (US$31.5 million) to ensure the deal goes through.
Mathieson's Support
Mathieson, who currently holds around 10% of Star's shares, is set to boost his stake to 20% with this move and secure a boardroom seat. If approved, this could mean a significant rejuvenation for these ailing assets.
Star's Search for a Lifeline
Star Entertainment has been on the hunt for a financial savior since February last year. Oaktree Capital Management offered a lifeline with AU$650 million (US$414 million)[6], but Star still needs approval from the Queensland and New South Wales governments.
Interestingly, Star confirms that it's also considering other offers, now including the Bally's deal. Just days before Bally's jumped into the race, Star already had an offer on the table from Hong Kong-based Chow Tai Fook and Far East Consortium. The latter invested 25% in Star's Brisbane-based casino, The Star Brisbane, aiming to acquire the remaining 50%[5].
A Second Chance under Bally's
Bally's Chairman, Soo Kim, sees immense potential in Star. "Our plan is the best way to preserves shareholder value," he says[3]. Kim believes this bid is preferable to selling off Star's assets piecemeal.
Meanwhile, Steve McCann, Star's CEO, remains optimistic. He believes the recent moves, including the Bally's offer, provide Star with the "capacity to have a viable future." However, the company is keeping an open mind, weighing multiple offers before making a decision.
A New Era for Bally's
Bally's itself went through a transformation last year, with its top investor purchasing the company for $4.6 billion. The investor, Standard General, previously owned 23% of Bally's. With this deal, they agreed to pay $18.25 per share in cash for the remaining shares, a premium of about 35%[7]. Shares jumped 26% after the confirmation of this deal.
With Star Entertainment on the brink of a major revamp, we're eagerly watching how this saga unfolds. So buckle up, folks, it's going to be an interesting ride!
- Bally's Corporation's deal with Star Entertainment Group, estimated at AU$250 million (US$158 million), could potentially be bolstered by AU$50 million (US$31.5 million) from Star's largest shareholder, Bruce Mathieson, securing Mathieson a boardroom seat and setting the stage for a significant rejuvenation of Star's assets.
- Oaktree Capital Management had supposedly offered AU$650 million (US$414 million) to Star Entertainment as a financial lifeline in February last year, but Star still requires approval from the Queensland and New South Wales governments.
- confidential sources confirmed that Star also considered other offers, such as the one from Hong Kong-based Chow Tai Fook and Far East Consortium, who invested 25% in Star's Brisbane-based casino with the aim of acquiring the remaining 50%.
