A report by the Australian Financial Review has revealed that progress is being made when it comes to the deal for Bally’s to take control of The Star Entertainment Group in Australia.
It’s a significant deal for the company, with it hoping to bring stability to the embattled operator in Australia. With reports circulating this weekend that the deal was on the brink of being concluded as The Star seeks to avoid administration.
Bally’s is set to provide a boost in the short term to The Star to ensure that the group overcomes any impending turmoil and transitions into a new era.
The overall deal is reportedly set to be around US$300m, with it being accelerated given the current position of The Star.
Bally’s has outlined ambitions in purchasing The Star to retain the group’s strong presence in the casino sector and strengthen it with the knowledge of Bally’s.
Soo Kim, Chairman of Bally’s, said:“This transaction provides Bally’s the opportunity to infuse The Star with what it needs to regain its position as Australia’s preeminent gaming destination. And it allows The Star shareholders to share in what we confidently believe will be a brighter future together.”
George Papanier, President of Bally’s added: “We are excited to bring our reputation and operating expertise to a wonderful set of properties that operate in fantastic markets. We are up for the challenge.”
Upon conversion of the Notes, Bally’s would own up to ~56.7% of the fully diluted share capital of The Star assuming it subscribes for 100% of the Notes, noting that The Star’s major shareholder, Investment Holdings Pty Ltd (which is controlled by the Mathieson family), may separately subscribe for a portion of the Notes, which would reduce Bally’s’ commitment by an equal amount.
The problems of The Star were compounded earlier in the year when its shares were automatically suspended from trading on the Australian Securities Exchange (ASX) after the casino operator failed to publish its 1HFY25 in due time.
Several proposals that came in for The Star, confidential, including indicative and non-binding proposals from Chow Tai Fook Enterprises Limited (CTFE) and Far East Consortium International Limited (FEC) looking to acquire the group’s 50% interest in its Destination Brisbane Joint Venture, along with other assets.
However, after an examination from The Star of the CTFE and FEC proposals, the operator stated that “none of the proposals have provided sufficient value for The Star”, adding that while it continues to engage with the CTFE and FEC, there is no certainty that a transaction will be concluded.The group also provided information on a debt financing proposal it is considering from funds associated with the global asset management firm, Oaktree Capital Management.
