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Read Full BioAustralian casino operator The Star Entertainment Group says it has agreed a $180.2 million (AUD 300 million) financial rescue package deal with Bally’s Corporation.
The deal could eventually see Bally’s take control of The Star. The US firm is set to buy around 56.7% of the Australian Securities Exchange-listed operator’s “fully diluted share capital.”
The deal must be approved by the regulatory Foreign Investment Review Board, which could potentially save The Star from administration.
Star: Bally’s Buyout Imminent?
In an official release, the Australian firm wrote that Bally’s would make the first payment – comprising a third of the total amount – “on or before” April 9.
Shareholders will then be asked to approve a second tranche, which will be subject to “regulatory approvals.”
The shareholders’ vote appears to be something of a formality, however. The Sydney-based firm wrote: “The Board of The Star intends to unanimously recommend that […] shareholders vote in favour […], in the absence of a superior proposal and subject to an independent expert concluding [that this] is in the best interests of The Star’s shareholders.”
The company added that “each director of The Star intends to vote all of The Star shares that he or she holds or controls in favour” of the deal.
Based in Rhode Island, Bally’s operates 19 casinos across 11 states. It also controls a horse racing track, a New York golf course, and several online sports betting sites.
The deal will make use of a “multi-tranche convertible note and subordinated debt instrument.”
Bally’s reportedly made an initial move for The Star in March.
Bid From Pub Baron Mathieson Still Possible, Reports Claim
In its own press release, Bally’s suggested that The Star’s major shareholder Bruce Mathieson “may separately subscribe for a portion of the notes.”
The 82-year-old Mathieson, a pub, hotel, and poker machine businessman, is thought to be worth over $1 billion.
Australian media outlets think that Mathieson is mulling a $100 million investment. If accepted, this would reduce the size of Bally’s investment by a third.
The Star runs The Star Sydney, as well as the Queensland-based The Star Brisbane. The firm’s shares are still suspended on the ASX after failing to provide the exchange with its mandatory half-year financial report for H2 of FY2024.
Bally’s: Australia a ‘Fantastic Market’
In its press release, Bally’s quoted its Chairman Soo Kim as stating: “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. It allows The Star shareholders to share in what we confidently believe will be a brighter future together.”
Bally’s added that it was excited to “bring its reputation and operating expertise” to “fantastic markets” in Australia.
“We are up for the challenge,” George Papanier, the American firm’s President, concluded.
In February, the Australian Securities and Investments Commission began prosecuting Stars Casino and some of its former executives.
The firm is accused of breaching money laundering protocols at its Sydney, Brisbane, and Gold Coast locations.
