The Latest on Bally's Takeover Bid for Star Entertainment Group
Wealthy Pub Magnate Mathieson Backs Bally's Acquisition Proposal for the Starlight Property
The world-renowned gaming giant, Bally's Corporation, is making progress in its mission to seize control of the struggling Australian entertainment company, Star Entertainment Group. Initial reports suggested Bally's planned a strategic investment of AUD $300 million into Star, with ambitions to claim a substantial stake [1][2].
However, the investment plan has seen adjustments. Bally's will now provide AUD $250 million via subordinated convertible notes, potentially giving them a 50.1% stake, while an additional AUD $50 million comes from the renowned Australian businessman, Bruce Mathieson, upon deal completion [5]. With these combined investments totaling AUD $300 million, Bally's could hold up to a 56.7% controlling stake pending shareholder approval [5].
The Support of Bruce Mathieson
Mathieson, a major shareholder in Star Entertainment Group and well-known in the pub and poker machine industry, has pledged his support for Bally's plan [3]. He will additionally contribute AUD $50 million, demonstrating the collaborative spirit of this rescue deal [5].
Mathieson's stake in Star could expand, potentially earning him a seat on the board should the takeover be accepted. In fact, he has already received regulatory approval to boost his stake to 20%, with prospects for it to grow further [3].
The Star Entertainment Group's Current Position
Following the endorsement from the prominent investor, the Star Entertainment Group has remained tight-lipped about Bally's proposal since its confirmation two weeks ago. The company is currently bound by an exclusivity agreement with its Hong Kong partners, Chow Tai Fook and Far East Consortium, who jointly own 50% of The Star Brisbane [4]. This agreement, preventing Star from negotiating with other parties, will persist until March 25 [4].
Despite the ongoing constraints, Star has begun exploring various fundraising alternatives, such as selling non-core assets, and is working diligently to resolve its liquidity issues [4].
The Confidence of Bally's Corporation
Bally's plans to rejuvenate Star's assets, arguing that the company is more valuable as a whole than being fragmented and sold piece by piece. "It's not too late," asserts Soo Kim, Bally's chairman, "Our proposal doesn't require any due diligence, consents, or anything. We can do this, and every deal we've done, people have said it's impossible" [3]. He emphasized that their initial strategy was designed "to preserve shareholder value" [3].
Bally's Corporation plans to revitalize Star Entertainment Group, using their expertise in gaming to potentially rejuvenate Star's poker offerings and other casino-related entertainment. After Bruce Mathieson's pledge of support and promised investment of AUD $50 million, Bally's could secure a significant stake in Star Entertainment Group.
