Largest Star shareholder endorses Bally's AU$250m bid
In an exciting twist for the ailing Australian gaming titan, Star Entertainment Group, their largest shareholder Bruce Mathieson, has given his blessings to a potential lifeline extension from Bally's Corporation. Initially accompanied by a AU$250 million offer, discussions now seem to revolve around a AU$300 million investment, with Mathieson himself ready to up his stake from 10% to 20%, further solidifying his faith in the proposition.
Star's Turbulent Seas Show Signs of Parting
Bally's, boasting confidence in Star Entertainment's resurgence potential, proposed the hefty investment to help the struggling company navigate its current financial and regulatory challenges. This sentiment has been echoed by Bally's Chairman Soo Kim, who believes that Star Entertainment Group has the requisite assets to make a comeback in the Australian casino market.
In recent interviews, Kim reaffirmed Bally's commitment to Star Entertainment's revival, offering assurance that the deal would preserve shareholder value while re-energizing the company's assets. He boldly asserted that Bally's is well-positioned to guide Star Entertainment Group through these tough times.
"We're often the last buyer on the block, and people doubt our moves. But every deal we've made has proven its merit. Star Entertainment can pull through with us," stated Kim, expressing optimism about Bally's ability to turn the tables for the beleaguered gaming giant.
The Proposed Investment: A Chance to Rise Above
It appears that Bally's proposed investment of AU$300 million will be funneled through multi-tranche convertible notes and subordinated debt instruments. This injection is expected to grant Bally's Corp and the Mathieson family a controlling 56% stake in Star Entertainment Group, subject to regulatory and shareholder approvals.
In case you're wondering, it's crucial to remind everyone that Bruce Mathieson, a pub and poker machine tycoon, already owns a 10% share in Star Entertainment Group. With regulatory clearance in hand, he's willing to pump in another AU$50 million to boost his portfolio up to 20%. This potential increase could make the sale of a controlling stake to Bally's a smoother process for Star's board and shareholders.
Other Suitors Knocking on Star's Door
Star Entertainment isn't a one-trick pony, as it has also been courted by other suitors. Chow Tai Fook and Far East Consortium, both based in Hong Kong, have shown interest in acquiring Star's 50% stake in The Star Brisbane property. This move aims to strengthen their position in the Australian land-based casino market while providing the much-needed liquidity to Star Entertainment Group during these tumultuous times.
Initial discussions regarding Bally's proposal were met with review, but conclusive progress has yet to be confirmed by Star Entertainment's board. While in February, Okatree Capital Management extended an offer to refinance Star Entertainment's AU$650 million debt, providing a breather for the company to tackle its current predicament.
As the drama unfolds, June 2025 promises a shareholder vote to finalize the arrangement, should it proceed. In the meantime, Star Entertainment Group hopes that Bally's investment will keep them afloat for about 15 months while waiting for regulatory approval on the full investment.
Hold on tight, folks, as we journey through the twists and turns of this gaming saga!
The potential investment of AU$300 million from Bally's Corporation, which may come through multi-tranche convertible notes and subordinated debt instruments, offers a chance for Star Entertainment Group to bolster their finances, with gambling and investing at play. Bruce Mathieson, a major shareholder who owns 10% of Star Entertainment Group, is willing to increase his stake to 20% by investing an additional AU$50 million, potentially facilitating the sale of a controlling stake to Bally's in the business realm.
