Bally’s looks to scupper Queen’s Wharf deal with offer to buy half of Star Entertainment
US operator Bally’s Corp. has made a last-minute bid to buy a controlling stake in Star Entertainment for $250m as it looks to offer an alternative to the agreement Star signed last week with Hong Kong partners Far East Consortium International and Chow Tai Fook Enterprises to sell its 50 per cent stake in the Brisbane Queen’s Wharf casino development for $53m.
Bally’s wants a 50.1 per cent stake in Star but said it was ‘very open to discussing a larger transaction depending on our discussions with respect to Star’s liquidity and capital needs.’
Soo Kim, Chairman of Bally’s Corporation, said: “We propose an alternative path that we believe will benefit all of Star’s key stakeholders, including your regulators, creditors, shareholders and employees. In short, we firmly believe that our approach of new long-term capital plus operational track record will unlock the best alternative for Star and its shareholders. We are prepared to move quickly and enter into a binding agreement with Star to implement an capital injection by 28 March 2025, with completion following promptly following regulatory and Star shareholder approvals.”
“To be clear, we remain very open to discussing a larger transaction depending on our discussions with respect to Star’s liquidity and capital needs. We would also be happy to explore alternative structures that would similarly preserve value for all key constituents, including regulators, creditors, equity holders and employees. Our proposal is fully funded and not subject to any financing contingencies. As of 31 December 2024, Bally’s had US$171m of cash on hand. In short, we have ample unrestricted liquidity to complete this transaction expeditiously.
“Importantly, our proposal delivers more than capital: Bally’s would partner with Star in deploying our
significant operating experience in turning around casino assets and growing highly successful casino businesses globally. 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. We are prepared to invest significant time and resources to work with the Company to return Star to profitability and sustainability. We have retained experienced financial and legal advisors and are prepared to engage immediately.
“We are also confident in our ability to expeditiously complete probity review in light of our long history
with of regulated operations, including in Nevada and New Jersey, as well as with the UK Gaming Commission. We would also expect to work closely with Star’s current Special Master throughout the
process. 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. While we understand the rationale for Star’s recently announced transactions, 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. We have already completed substantial due diligence based on publicly available information and leveraging our understanding of the Australian gaming market and extensive experience in the international gaming sector. As a result, we are well positioned to work with Star in a focused manner to deliver a binding proposal within a short period of time.
Anne Ward, Chairman of Star Entertainment, said: “The Star Entertainment Group confirms that, this morning, it received from Bally’s Corporation an unsolicited, non-binding proposal for additional funding. Bally’s Proposal outlines a possible transaction which states, among other things, that Bally’s Corporation would provide “a capital raise of at least A$250m, pursuant to which The Star would issue convertible notes subordinated to The Star’s existing senior lenders. The convertible notes would be convertible into at least 50.1% of The Star’s fully diluted ordinary shares. Bally’s would underwrite the entire amount of the capital raise, but would be supportive of providing The Star’s existing shareholders the right to participate in a significant portion of the offering on a pro rata basis.” The letter does not include any details of other proposed terms and conditions. The Board of The Star will review Bally’s Proposal. However, there is no certainty that it will be progressed.”
Analsyts welcomed the offer from Bally.
Omkar Joshi, Chief Investment Officer at Opal Capital Management, said: “It’s good to see different options emerging which could then avoid a voluntary administration process. There’s still quite a lot of work that needs to be done by Star’s board and management in comparing the plans and seeing if this latest proposal from Bally potentially brings out others as well. It does give them more time to get through their cashflow issues given the access to new liquidity which is helpful.”
Bally’s owns and operates 19 casinos across 11 US states, along with a golf course in New York and a horse racetrack in Colorado, and holds OSB licenses in 13 jurisdictions across North America. It recently expanded its international reach through the acquisition of Aspers Casino in Newcastle, UK. Bally’s Interactive International division (formerly Gamesys Group/LSE:GYS) is a leading global interactive gaming operator with strong market shares in the United Kingdom and Spain, operating such brands as Virgin Games and Monopoly Casino and Bally Bet, a first-in-class sports betting platform.
It also holds a significant economic stake in Intralot, a global lottery management and services business. With 11,500 employees, its casino operations include approximately 17,700 slot machines, 630 table games, and 3,950 hotel rooms. It also holds rights to developable land in Las Vegas at the site of the former Tropicana Las Vegas and are in the process of developing Bally’s Chicago, which will operate exclusively in the third largest city in the United States.
