Bally's Aussie Takeover: What's Really Going Down Under
Australian Casino Giant Seals $180m Takeover Deal for Bally's, Rescuing a Prominent Star
Bally's Corporation is set to take over three of Australia's top casinos, following the Star Entertainment board's reported acceptance of its AUD 300 million takeover offer.
According to the Sydney Morning Herald, this move by the US gambling powerhouse puts Bally's in charge of Star's casinos in Brisbane, Sydney, and Queensland, offering a lifeline to Star and saving it from financial ruin.
In a twist, lawyers are finalizing the paperwork for the deal, which could be signed as early as Monday. Bally's is set to inject AUD 250 million into Star, with controlling shareholder Bruce Mathieson adding an additional AUD 50 million.
The Cash Boost
Star reportedly expects to receive the cash upfront from Bally's and Mathieson to meet its immediate financial obligations.
Acquiring The Star, Sydney; The Star Gold Coast; and The Star Brisbane, will provide Bally's with control of these iconic casinos. However, it's not just about control. Star was in dire straits, faced with imminent collapse and approximately 9,000 jobs at risk. Bally's stepped in as the company's unlikely savior in March.
Star's timely lifeline came after a AUD 940 million offer from property development fund Salter Brothers Capital fell through due to a lack of a binding debt commitment letter.
What's Next?
Bally's acquisition of a controlling interest in Star is subject to approval from the Foreign Investment Review Board and casino regulators in NSW and Queensland. Approval appears likely given Bally's prestigious pedigree in the gambling industry and its proven track record in acquiring 19 casinos through distressed sales.
Chairman Kim also went on a charm offensive while inspecting Star's casinos earlier this year, expressing surprise at their poor performance. With these developments, the future of Australia's casino industry under Bally's is shaping up to be an exciting one.
Behind the Scenes
The deal structure involves an initial AUD 100 million investment from Bally's, with a second tranche of AUD 200 million contingent upon shareholder and regulatory approvals[2][3]. However, the deal has been amended following AUD 100 million in investment from Star's largest shareholder, Bruce Mathieson, reducing Bally's initial commitment to AUD 200 million[1]. A shareholder meeting is expected in June to vote on the transaction. The deal also necessitates regulatory approvals, and if these are not finalized by October 7, 2025, a partial payment of AUD 100 million can be made[1][2]. Upon completion, Bally's could potentially control up to 56.7% of Star's shares, largely through convertible notes and subordinated debt[5]. Overall, Bally's takeover bid is progressing but still depends on shareholder and regulatory support. The deal's success is a crucial step in revitalizing Star Entertainment and Australia's casino industry.
- Bally's Corporation is reportedly finalizing a AUD 200 million investment, following the reduction of an initial commitment due to an additional AUD 100 million investment from Star's largest shareholder, Bruce Mathieson.
- The shareholder meeting, expected in June, will vote on the transaction that, if approved, could give Bally's control over up to 56.7% of Star's shares.
- The success of Bally's takeover bid, pending regulatory and shareholder approval, is crucial for the revitalization of Star Entertainment and Australia's casino industry.
