【Gates of Olympus Xmas 1000】Star Entertainment reportedly accepts Bally's A$300m buyout offer

The agreement, said to have been approved by Star’s board of directors and lenders over the weekend, is intended to help the embattled Australian casino operator avoid administration amid ongoing financial turmoil.

Under the terms of the proposed deal, Bally’s will inject at least A$250m into Star via convertible notes, which could be transformed into a 50.1% controlling equity stake if approved by regulators and shareholders.

An additional A$50m is expected to come from Bruce Mathieson, Star’s largest shareholder, who currently holds around a 10% stake in the company.

Star has not yet formally confirmed the deal. However, AFRreports that documentation could be finalised as early as today (7 April).

It is believed that part of the A$300m injection is set to be delivered this week, to help Star meet urgent financial obligations.

Despite the tentative agreement, Star is said to be seeking a higher valuation for the equity component.

The company has reportedly asked Bally’s to raise its offer, suggesting Star believes the original proposal undervalues the firm’s long-term potential.

Bally’s Chairman Soo Kim (pictured) emphasised the strategic value of keeping Star’s Australian casino properties — Sydney, Gold Coast, and Brisbane — intact.

He stated the proposal would deliver greater operational flexibility and value for Star’s stakeholders and reiterated Bally’s confidence in its ability to reverse the fortunes of underperforming casino assets through its global expertise.

Star in desperate need of funds

To supplement the Bally’s offer, Star is also reportedly exploring an additional equity placement representing up to 15% of its issued capital. Notably, this could be executed without requiring shareholder approval.

However, such a move may offer only short-term relief, given the company’s depressed market value.

Trading of Star shares has been halted since 1 March, when the price had fallen to A$0.11, valuing the group at just A$316m. This marks a steep decline from its previous highs of A$5.73 per share.

The financial stress facing Star intensified after the collapse of a A$750m refinancing arrangement with Salter Brothers, an Australian investment firm.

That deal had included the sale of Star’s 50% stake in the Queen’s Wharf Brisbane project. Following the collapse of that plan, the only serious offer remaining was Bally’s unsolicited bid.

Separately, Star had previously announced an agreement to offload its 50% stake in The Star Brisbane to Chow Tai Fook and Far East Consortium, partners based in Hong Kong.

However, that transaction has not yet been finalised. To provide short-term liquidity, Star received a A$35m advance payment under that agreement.

Bally’s strengthening global dominance

Bally’s’ global footprint rapidly continues to grow. In the US, it has 19 casinos in 11 states and a horse racetrack in Colorado. It also holds online betting licences in 13 North American jurisdictions.

In addition, Bally’s has an expanding presence in Europe, having recently acquired Aspers Casino in Newcastle, UK.

Bally’s international interactive arm maintains market share in the UK and Spain, running brands such as Virgin Games, Monopoly Casino, and Bally Bet.

The company’s global operations span approximately 17,700 slot machines, 600 table games, and nearly 4,000 hotel rooms, employing around 11,500 people.

Bally’s is also engaged in major development projects including Bally’s Chicago, and holds rights to the land in Las Vegas formerly occupied by the Tropicana.

If successful, the deal between Star and Bally’s would mark a rare example of a foreign operator gaining majority control of a major Australian casino group.

Regulatory approval will be critical, given the sensitive nature of casino licensing and the historical reluctance of Australian regulators to allow foreign control of domestic gaming operations.