SYDNEY: The Star Entertainment Group (ASX: SGR) confirmed on Monday that it has received an unsolicited, non-binding funding proposal from Bally’s Corporation.
The proposal outlines a potential capital raise of at least A$250 million (approximately $165 million USD) to support The Star’s financial needs.
Under the terms of the proposal, The Star would issue convertible notes subordinated to its existing senior lenders. These notes could be converted into at least 50.1% of The Star’s fully diluted ordinary shares, giving Bally’s a controlling stake in the Australian casino-entertainment company.
Bally’s has offered to underwrite the entire capital raise but has expressed support for allowing The Star’s existing shareholders to participate in the offering on a pro rata basis.
In a letter to The Star’s Board of Directors, Bally’s Chairman Soo Kim emphasized the company’s operational expertise and financial stability, stating that the proposal is fully funded and not subject to financing contingencies. As of December 31, 2024, Bally’s reported $171 million in cash on hand and access to a $620 million revolving credit facility.
Bally’s, a global casino-entertainment company with operations in 11 U.S. states and a growing international presence, highlighted its experience in turning around casino assets and growing successful gaming businesses. The company expressed confidence in its ability to work with The Star’s regulators and stakeholders to expedite the transaction, which would require regulatory and shareholder approvals.
The Star’s Board of Directors has acknowledged the proposal and stated that it will review the terms. However, the company cautioned that there is no certainty the proposal will be progressed.
The proposal comes as The Star faces financial challenges and regulatory scrutiny in Australia. Bally’s has positioned its offer as a way to provide long-term capital and operational support to stabilize and grow The Star’s business.
Bally’s has requested a prompt response from The Star and indicated its readiness to engage in further discussions to finalize the terms of the transaction.
Bally’s Corporation (NYSE: BALY) owns and operates 19 casinos across 11 U.S. states, along with a golf course in New York and a horse racetrack in Colorado. The company also holds online sports betting licenses in 13 North American jurisdictions and has a significant presence in the international gaming market, including the recent acquisition of Aspers Casino in the UK.