By PAUL O’DONOGHUE, Senior Correspondent
U.S. CASINO operator Bally’s Corporation has made an unsolicited AU$250 million ($158 million) bid for a controlling stake in Australia’s Star Entertainment Group.
The offer challenges Star’s existing deal to sell part of its Brisbane business.
Bally’s proposal, outlined in a letter to Star’s board, aims to recapitalize the struggling casino operator while keeping its assets in Brisbane, Sydney, and the Gold Coast. This contrasts with Star’s agreement last week to sell a 50% stake in The Star Brisbane to Hong Kong-based Chow Tai Fook Enterprises and Far East Consortium.
Bally’s plan would split Star into two entities. One would focus on Brisbane operations. The other would manage the Gold Coast and Sydney properties. The company argues that keeping Star’s full portfolio would strengthen its long-term viability.
“Our strategy for Star is built on the simple premise that keeping in place Star’s current businesses, assets, and platforms will provide a stronger and more successful business over time,” Bally’s Chairman Soo Kim said.
Bally’s pursues Star Entertainment
The offer comes as Star Entertainment has been struggling to deal with a string of AML issues.
The company has faced a series of fines and probes from regulators due to an alleged failure to rein in money laundering and fraud at its two resorts. The problems have pushed the company, which is Australia’s second-largest casino operator, to the brink of bankruptcy.
Bally’s highlighted its experience in turning around struggling casinos. It offers both financial backing and operational expertise. The proposal includes a AU$250 million investment through convertible notes, giving Bally’s a 50.1% controlling stake. The company has also secured $800 million (AU$1.27 billion) in cash and credit, ensuring the deal is fully funded.
Additionally, Bally’s has shown flexibility in increasing its stake if needed. It is also open to structuring the deal to benefit regulators, creditors, shareholders, and employees.
“We believe that our proposal offers Star and its stakeholders far greater value and operational flexibility, as well as the upside from retaining Star’s current projects and other assets,” Kim added.
Star has been under financial strain. It recently secured AU$35 million ($22 million) from its Hong Kong partners as part of its Brisbane asset sale. The company is also working to refinance more than AU$400 million ($252 million) in debt after facing insolvency risks.
Bally’s, headquartered in Rhode Island, operates 19 casinos across 11 U.S. states. It also owns a horse racetrack and holds online sports betting licenses in 13 North American jurisdictions. The company has expanded into the UK and Spain and invested in lottery services provider Intralot SA.
Beyond its existing properties, Bally’s holds land rights at the former Tropicana site in Las Vegas. It is also developing a major casino project in Chicago.
Kim emphasized Bally’s track record in revitalizing distressed casinos. “Our team has successfully improved more than 20 individual property acquisitions over 15 years in a variety of challenging circumstances, across the entire spectrum of gaming regulatory environments and market conditions,” he said.
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