Embattled Australian casino operator, The Star Entertainment Group, has confirmed receiving an unsolicited, non-binding proposal from Bally’s Corporation for additional funding.
The proposal, submitted on Monday, comes just days after The Star announced it had entered into a binding agreement to sell its 50 percent stake in the Queen’s Wharf project in Brisbane to Far East Consortium International and Chow Tai Fook Enterprises.
According to The Star’s filing, Bally’s proposal outlines plans for The Star to issue convertible notes that would be subordinated to its existing senior lenders. These notes would be convertible into a controlling 50.1 percent of The Star’s fully diluted ordinary shares.
Bally’s has indicated its willingness to underwrite the entire AU$250 million ($158 million) capital raise while allowing The Star’s existing shareholders to participate significantly on a pro rata basis.
In a letter addressed to Star Entertainment Group, Bally’s Chairman Soo Kim emphasized that the company sees this investment as a strategic opportunity to restore The Star’s financial stability and enhance long-term growth.
“We firmly believe that our approach—of new long-term capital plus operational track record—will unlock the best alternative for The Star and its shareholders,” Soo Kim stated.
The letter highlighted Bally’s extensive experience in casino operations, detailing its ownership of 19 casinos across 11 US states, its significant presence in the UK and Spain’s gaming sectors, and its ongoing projects in Las Vegas and Chicago. Soo Kim underlined that Bally’s has a track record of successfully improving over 20 individual properties in various challenging environments.
Bally’s has also assured that its proposal is fully funded and not contingent on any financing conditions, noting that as of December 31, 2024, the company had $171 million in cash and access to a $620 million revolving credit facility.
The Star’s Board is now reviewing Bally’s proposal but cautioned that there is no certainty the offer will proceed further. The letter expressed Bally’s readiness to engage with regulators, creditors, and other stakeholders to facilitate a smooth process.
While Bally’s acknowledged The Star’s recent asset sale, Soo Kim emphasized that Bally’s proposal would offer “far greater value and operational flexibility,” preserving The Star’s businesses, assets, and platforms.
“Our strategy for The Star is built on the simple premise that retaining the company’s current businesses, assets, and platforms will provide a stronger and more successful business over time,” Soo Kim wrote.
The Star has yet to respond to Bally’s offer.
