Majority shareholder advocates for Bally's AU$250m proposal in relation to Star entity.
Rewritten Article:
Major Shareholder Backs Bally's $300m Stake Acquisition in Star Entertainment
Looks like Australian gaming giant Star Entertainment Group might just catch a break, as its largest shareholder has given the green light to a substantial investment offer from Bally's Corporation.
Star Hunts for a Lifeline in the Face of Regulatory Woes
In March, Bally's put forward an attractive proposition of approximately AU$300 million to secure a controlling 56.7% stake in Star Entertainment Group. This move aims to help the embattled company finally climb out of its financial and regulatory quagmire.
Bally's Chairman Soo Kim is convinced that Star has what it takes to shine in the Australian casino market, sharing this sentiment in various interviews.
"Time is not running out, and our proposal is open with no due diligence or conditions required. We are prepared to rescue Star," Kim told the Australian Financial Review recently, emphasizing Bally's Corp's readiness to help the group weather this challenging phase.
Kim has consistently affirmed Bally's original promise from March, asserting the company's ability to breathe new life into Star's assets while maintaining shareholder value.
Mathieson Lobbies to Boost Own Stake in Star
Clearly backing Bally's move, Bruce Mathieson, who owns numerous pubs and poker machines and already holds a 10% share in Star, is on board with the deal and willing to invest another AU$50 million to hike his stake to 20%.
Regulatory approvals are in place for Mathieson to increase his stake, simplifying the process for Star to relinquish a controlling stake to Bally's.
Star has been grappling with financial hardship, haggling with two major partners - Chow Tai Fook and Far East Consortium, both based in Hong Kong, over buying out its own 50% stake in The Star Brisbane property. The deal would bolster their standing in the Australian land-based casino market and help Star sail through this tough period with the necessary cash flow.
When Bally's proposal landed in March, Star's board affirmed they were considering it but were uncertain of the deal's progression.
Previously, in February, Okatree Capital Management proposed refinancing Star Entertainment's AU$650 million debt, offering more breathing room for the company to tackle its current predicament.
Image credit: Unsplash.com
Insights From Enrichment Data
- The deal involves AU$300 million in total, including convertible notes and subordinated debt. Tranche 1 of AU$100 million was paid by 9 April 2025, and the remaining Tranche 2 of AU$200 million is pending shareholder approval and regulatory consent.
- If Mathieson's investment goes through, Bally's commitment will be reduced to AU$200 million, with Mathieson's stake increasing.
- No competing offers for Star's assets are mentioned in the available disclosures, making Bally's the sole proposed rescuer for Star as it faces urgent liquidity issues and potential administration.
- Bally's aims to utilize its operational expertise to rehabilitate Star, which has faced regulatory penalties and financial losses. The deal is framed as a turnaround effort to restore Star's market position. The final structure will depend on the outcomes of the shareholder vote (expected by September 2025) and regulatory decisions.
- Bally's Corporation, with its substantial investment offer of approximately AU$300 million, is poised to reinvigorate the business of the Star Entertainment Group, as backed by its major shareholder.
- In a recent interview, Bally's Chairman Soo Kim expressed his belief that Star Entertainment Group has the potential to excel in the Australian casino market, projecting a positive future for the company.
- Shareholder Bruce Mathieson, already holding a 10% share in Star, has offered to invest an additional AU$50 million to increase his stake to 20%, echoing support for Bally's Corporation's investment proposal.
- If regulatory approvals are granted, Bally's Corp's contribution to Star Entertainment Group's financing may be reduced, given Mathieson's planned investment, while Mathieson's stake in Star will see a significant boost.
