Star Says Suitors Circling as Hard Rock Reportedly Makes Offer

Troubled Australian casino operator Star Entertainment Group said several suitors have approached the company about possible deals, after a newspaper reported that a consortium led by Hard Rock Hotel & Casino made a takeover proposal.

Bloomberg
First Published20 May 2024
Star Says Suitors Circling as Hard Rock Reportedly Makes Offer
Star Says Suitors Circling as Hard Rock Reportedly Makes Offer

(Bloomberg) -- Troubled Australian casino operator Star Entertainment Group said several suitors have approached the company about possible deals, after a newspaper reported that a consortium led by Hard Rock Hotel & Casino made a takeover proposal.

Star “has received inbound interest from a number of external parties regarding potential transactions,” the Sydney-based company said Monday. “At this stage, none of the approaches has resulted in substantive discussions.”

Star’s statement followed a report in the Australian Financial Review that a group of suitors led by Hard Rock, operator of The Mirage in Las Vegas and other casino resorts in North America, had recently submitted an offer to Star. According to the newspaper, the proposal included injecting fresh capital into Star, re-branding the company and separating its properties from the casinos.

Star’s future in Sydney, home to the company’s flagship casino, is hanging in the balance as a fresh inquiry determines whether it has made enough progress into addressing wrongdoing to keep its gaming license. The casino has been run by a government-appointed manager since a damning report in 2022 found it had lax anti-money laundering controls, allowed patrons to flout China’s capital controls and encouraged problem gamblers. 

A spokeswoman for Star declined to comment beyond the company’s statement. Hard Rock didn’t respond to questions, the Australian Financial Review reported.

Star’s chief executive officer and chairman resigned this year and the company’s shares have tumbled 60% in the past 12 months. The company now has a market value of A$1.3 billion ($870 million).

Read More: Star Chair and Ex-CEO Plotted to Oust Regulator, Hearing Told

It’s not clear what any successful buyer of Star would end up owning. Star told the Sydney inquiry last week that it didn’t consider itself fit to operate the city casino in its own right. It argued that the current arrangement that allows Star to run the casino with an external manager should be extended.

The Sydney inquiry’s final report is due on July 31. Meanwhile, Star’s two other casinos  — in Gold Coast and Brisbane in the state of Queensland  —- are also operating under government caretakers.

Hard Rock is working with Australian and US investors on its Star proposal and is being advised by KPMG, according to the AFR report. The bid aims to turn the Australian company into a business less dependent on casino income and more focused on entertainment, restaurants and hotels, the report said.

More stories like this are available on bloomberg.com

©2024 Bloomberg L.P.

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