Star Entertainment’s largest shareholder backs Bally’s takeover bid
Star Entertainment’s largest individual shareholder, Bruce Mathieson, has backed Bally’s proposed takeover bid for the embattled casino operator. Mathieson has also pledged to invest an additional A$50 million (€29.04m) in the company if the deal goes through.
Mathieson, a well-known figure in Australia’s pub and gaming industry, holds about 10 percent stake in Star. Local reports said he could raise his stake in Star and take a seat as a board member should the deal progress. Reports also indicate that Mathieson has regulatory approval to increase his stake to as much as 20 percent. As the company’s largest individual shareholder, his support is critical for any major decision affecting Star’s future and his willingness to inject fresh capital into Star is what the company would highly benefit from.
Takeover bid for majority stake
In early March, Star received an unsolicited bid from the US gaming powerhouse Bally’s offering to inject at least A$250 million in capital in exchange for a 50.1 percent stake in the company. Bally’s said it was willing to convert its offer into subordinated convertible notes. These notes would eventually convert into a 50.1 percent majority stake in Star.
Bally’s recapitalisation package is fully funded, not subject to approval and as stated by the company’s Chairman Soo Kim, is “very open” to discussing a larger transaction. Star said it would review the proposal, one of several that it is currently considering as it struggles to continue as a going concern and tries averting voluntary administration.
Star reviewing proposals
In addition, Star has given Salter Brothers, its suitor, until the end of March to complete due diligence and agree to a crucial $750 million rescue package. This comes as the casino giant teeters on the edge of collapse for the second time in just a month.
Steve McCann, the CEO of Star Entertainment, has been in talks with various potential investors since early March. These include the Salter Brother’s proposal, and the other two offers are Star securing a A$250 million bridging facility with U.S. hedge fund King Street Capital Management and a last-minute deal to sell its stake in its Brisbane complex to its Hong Kong partners, Chow Tai Fook Enterprises and Far East Consortium Enterprises.
This agreement would see the Hong Kong partners paying A$53 million ($33.4 million) for Star’s stake in the Brisbane project, Far East said in a filing on the Hong Kong Exchange (HKEX). The first payment of A$35 million will be made on 7 March (Friday). The deal injects crucial funds into the company’s nearly empty coffers.
