Posted on: May 20, 2024, 02:15h.
Last updated on: May 20, 2024, 02:15h.
Shares of Star Entertainment surged Monday amid reports that entities with ties to Hard Rock International and other gaming groups may be mulling acquisition bids for the embattled Australian casino operator.
The Australian Financial Review broke news that a consortium led by Hard Rock — the gaming arm of Florida’s Seminole Tribe — and other unidentified groups have examined takeover bids for Star, but other media reports surfaced indicating that the Tribal gaming giant isn’t looking into the Australian firm. In a filing with the Australian Securities Exchange (ASX), Star said it hasn’t received an offer directly from Hard Rock.
However, the Company has received inbound interest from a number of other external parties regarding potential transactions including a consortium of investors which includes the entity Hard Rock Hotels & Resorts (Pacific), which The Star understands is a local partner of Hard Rock,” according to the regulatory document.
The Star told investors that none of the advances it’s received from prospective suitors have led to discussions of substance.
Star Entertainment Could Be Risky Bet for Any Suitor
Amid a now a lengthy anti-money laundering probe, Star is at risk of losing control of its flagship venue — The Star Sydney. That venue has been run by the Australian government since 2022.
Following the first Bell inquiry, Star was stripped of its gaming license and slapped with a $65 million by Aussie regulators. The currently ongoing second version of the Bell inquiry is looking into whether or not Star has made progress in terms of bolstering money laundering controls. The New South Wales Independent Casino Commission (NICC) previously said it wasn’t satisfied with the company’s efforts. Last week, Star told regulators it still doesn’t believe it is fit to run the casino and that it wants to extend its arrangement with the government.
The final report on the second Bell inquiry is slated to be released on July 31 and Star’s other two venues — The Star Brisbane and the Star Gold Coast — are also run by the government. That could muddy the waters regarding exactly what any buyer of the company would actually be paying for. The Australian Financial Review article noted Hard Rock is willing work with Australian regulators and could be open to providing the Star with capital. The Tribal gaming entity is also interested in helping the Star reduce dependence on casinos while placing new emphasis on non-gaming amenities.
“The Star remains focused on its remediation activities in New South Wales and Queensland and participating in the Bell Two Inquiry,” said the operator in the ASX filing.
Normally, Star Would Be Appealing Takeover Target
If not for the regulatory uncertainty, executive upheaval, and debt burden, Star would be an appealing takeover target for any number of suitors. It’s one of the largest gaming operators in Australia — a country know for attracting scores of well-heeled Chinese tourists that want to wager outside of Macau.
It’s possible that confluence of factors chases bidders away or broadens the list of prospective suitors thinking they might be able to exploit Star’s vulnerabilities.
As for Hard Rock, the company isn’t a stranger to operating gaming venues outside in the US. It currently runs a casino in Ontario, Canada, a casino hotel in the Dominican Republic, and is building an integrated resort in Athens, Greece.
