Star Entertainment Group acquiesces to Bally's improved AU$300m bid

• Bally’s Corp set to acquire 56.7% stake in Star Entertainment Group
• Star averts cash-crunch with immediate payment of AU$100m due by tomorrow
• Bally’s takes on a risky investment but has the experience to turn it around

Star Entertainment Group faced an imminent cash-crunch over the weekend, with the company failing to refinance its debt and raise fresh cash to allow it to maintain operations as it continues to waddle through a business and regulatory quagmire.

Star Entertainment averts financial calamity by reaching out to old friend

However, the company has been able to renegotiate an expired offer made by Bally’s Corp earlier this year, and moved ahead with the acquisition of the latter of a control stake in Star. The deal sees Bally’s Corp pay AU$300m ($180m) for a 56.7% stake, up from the previously proposed AU$250m, in the company in the form of convertible notes.

Star will now receive AU$100m by tomorrow, Wednesday, August 9, which will allow it to remain afloat and meet any outstanding payments that are due immediately. Another AU$200m will be cleared once shareholders and regulators give an official nod to the deal to move forward.

Two separate tranches of AU$100m will be paid for meeting both goals specifically, and no later than October 7, 2025, the company explained in its ASX filing shared on the official website.

Star also said in the filing that it is currently engaging the company’s largest shareholder, Investment Holdings Pty Ltd, which is backed by the Mathieson family, and which could be open to a possible subscription of up to AU$100m which would mean that Bally’s Corp’s involvement would only contribute AU$200m in the end, but no specifics have been shared as to how this would impact the corporation’s holding into Star.

Bally’s investment into the beleaguered Australian gaming and hospitality major has been described as "aggressively opportunistic," with the company focusing on an asset that clearly has potential but one that might tie down a considerable resource trying to navigate it out of its current predicament.

Bally’s takes on a risky asset, but has the experience and capital to strengthen it

However, there are upsides, too. Bally’s Corp operates in one of the world’s most heavily regulated markets, the United States, and this gives it the legal acumen to navigate thorny issues with watchdogs, the likes of which Star Entertainment Group is facing in Australia right now.

Bally’s Corp importantly has experience in similar investments. The company acquired distressed legacy properties and assets in Atlantic City and Las Vegas and managed to turn them around despite flagging results and near-collapse of financial operations. This experience could yet prove invaluable in Australia, but only time will tell.

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