US casino operator Bally’s Corp and partner Investment Holdings Pty Ltd are expected to complete the conversion of their shares and take control of Australia’s Star Entertainment Group within this week.
Current Star chairperson Anne Ward, who also confirmed that she will step down this week, revealed during opening remarks at the company’s Annual General Meeting on Tuesday that Bally’s has already submitted a conversion notice, with the process for conversion of its investment into shares likely to be complete in the coming days. Investment Holdings was expected to submit its conversion notice before the end of Tuesday.
As reported by Inside Asian Gaming, the two companies have invested a combined AU$300 million (US$195 million) into Star, which will once converted give Bally’s around 38% equity and Investment Holdings around 23% of the issued share capital of the company – a combined holding of around 61%.
Upon doing so, Bally’s will be entitled to name two members to a a new-look Board of Directors for Star – also likely to take place later this week – while Star recently announced Bruce Mathieson Jr as a non-executive director and representative of Investment Holdings.
In revealing some details of the Bally’s takeover process, Ward added, “My commitment during this period has been to ensure an orderly transition to the new major shareholders and strengthen the financial position of the Star.
“As set out in the Notice of Meeting, I intend to retire from the Board once the convertible notes issued to Bally’s Corporation and Investment Holdings are converted into shares and relevant appointments are then made to the Board. This is expected to be completed later this week. Accordingly, my re-election today is only for a matter of days.”
Delays expected to Brisbane casino sale
While the completion of the investment by Bally’s and Investment Holdings into Star is nearing completion after they each received relevant regulatory approvals on Friday, Star’s Managing Director and Group CEO Steve McCann revealed that another critical transaction in securing the company’s financial future – the sale of its 50% stake in Destination Brisbane Consortium (DBC) – is facing delays.
DBC, of which Hong Kong’s Chow Tai Fook Enterprises and Far East Consortium currently hold 25% each, is the owner and operator of The Star Brisbane and surrounding Queen’s Wharf precinct.
Having recently announced an agreement that would see Chow Tai Fook and Far East Consortium buy out Star’s 50% interest – therefore freeing it of significant debt in relation to the AU$3.6 billion (US$2.33 billion) project – McCann said the conditions precedent to the transaction are looking unlikely to be met by the original sunset date of 30 November 2025.
“In light of this, our joint venture partners have requested an extension of the refinancing date for the DBC debt facility from late December 2025 to 31 March 2026,” he explained.
“Based on lender approval being confirmed, this would mean The Star’s parent company guarantee remains on foot for this additional period pending a release on achieving completion of the DBC transaction.
“If an extension to the DBC transaction sunset date is agreed by all parties, we will continue to work with our joint venture partners to satisfy the outstanding conditions.”
McCann added that, although both parties retained the right to terminate the agreement should they not agree an extension to the sunset date, he was confident that all remain committed to completing the transaction.
Ward added that the company had not yet received any update from AUSTRAC on any fine to be levied for historical breaches of anti-money laundering laws.
In comments to Inside Asian Gaming shortly after his company received probity approval last Friday, Bally’s chairman Soo Kim said he was confident his team could reverse Star’s fortunes.
“We think that there’s potentially hundreds of millions of annualized revenues that we think we can get [and] hundreds of millions of annualized expenses that can be taken out of the business. We think we can make a difference on both sides and we’re looking forward to doing so.
“We’re going to start to really bring changes as quickly as we can.”
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