Majority shareholder supports Bally's AU$250m proposition for Star.
Revamped Article:
Star's financial predicament might find a reprieve with Bally's eyeing a AU$300 million bid for a controlling stake.
Star's Financial Tides Turning?
Troubled Australian gaming powerhouse Star Entertainment Group could be sailing towards calmer waters, as Bally's Corporation make waves with an ambitious AU$300 million proposal. The deal aims to provide the much-needed lifeline for Star, alleviating its ongoing financial and regulatory struggles.
Bally's is bullish about Star's potential, expressing confidence in the company's ability to bounce back and shine in the Australian casino market. Sharing this optimism is Bally's Chairman Soo Kim, who has vocally backed the deal in recent interviews.
Kim argued that Bally's Corp is well-positioned to help Star Entertainment Group ride out these turbulent times. He reminded the Australian Financial Review that, "Our proposal is not subject to due diligence or consent or anything. We can do this. Every deal we've done, people say 'There's no value there, or it is too hard'. We are usually the buyer of last resort."
Mathieson Weighs In
Among Star's shareholders, Bruce Mathieson, a businessman with a stake in pubs and poker machines and a 10% ownership of Star Entertainment Group, has given the thumbs-up to the deal. Furthermore, he's expressed his willingness to up his stake to 20% by investing an additional AU$50 million. With Mathieson on board, it might be easier for Star to persuade its own Board and shareholders to let go of a controlling stake to Bally's.
Other Suitors on the Horizon
Star has been treading rough financial waters, leading the company to court other potential partners in the face of Chow Tai Fook and Far East Consortium, both based in Hong Kong. These firms have displayed interest in purchasing Star's 50% stake in The Star Brisbane property, which recently opened in August 2021, consolidating their standing in the Australian land-based casino market and providing Star with much-needed liquidity.
Star has yet to declare its commitment to Bally's offer, which it is currently reviewing. In February, Okatree Capital Management famously offered to refinance Star Entertainment's AU$650 million debt, offering the company a chance to weather its current storm.
Image source: Unsplash.com
Enrichment Data:
Overall:
The heart of Bally's Corporation's involvement with Star Entertainment Group revolves around a AU$300 million strategic investment, structured primarily as convertible debt to secure a controlling stake, with the following key developments:
- Deal structure:
- Initial AU$300 million agreement (7 April 2025) via convertible notes and subordinated debt, split into:
- Tranche 1: AU$100 million (disbursed by 9 April 2025)[1], partially adjusted to include AU$33 million from shareholder Bruce Mathieson[2].
- Tranche 2: AU$200 million pending shareholder/regulatory approvals by October 2025[2][4].
- Revised participation: Mathieson, Star’s largest shareholder, committed AU$100 million, reducing Bally’s effective contribution to AU$200 million[2].
- Ownership stake:
- Bally’s convertible notes are set to grant a 56.7% controlling stake upon conversion[3][4].
- Approvals:
- Shareholder vote expected in June 2025[2].
- Regulatory clearances (timeline unspecified) required for Tranche 2[1][4].
- Urgency:
- Tranche 1 addresses Star’s immediate liquidity needs, with the company’s shares halted since February 2025[2].
- Bally's Corporation, aiming to reinvigorate Star Entertainment Group, has offered a strategic AU$300 million investment.
- The deal, initially structured as convertible debt, is expected to provide Star Entertainment Group with a controlling stake if the convertible notes are converted.
- Shareholder Bruce Mathieson has expressed support for the deal, offering an additional AU$50 million to increase his stake to 20%.
- If approved by shareholders and regulators, Bally's Corp could reinvigorate Star Entertainment Group's business, providing a boost to investing in the Australian casino market.
