Bally’s heading Down Under
Bally’s Corporation is adding three of Australia’s leading casinos to its portfolio after the Star Entertainment board reportedly accepted its AU$300m ($180.4m) takeover offer.
handed Bally’s the keys to Star’s casinos
According to the Sydney Morning Herald on Monday, the move by the US gambling powerhouse handed Bally’s the keys to Star’s casinos in Brisbane, Sydney, and Queensland, while saving the Aussie firm from financial collapse.
Media reports state lawyers are finalizing paperwork for the Bally’s takeover and that the deal could get inked Monday.
Bally’s will reportedly inject AU$250m ($150.3m) into Star with controlling shareholder Bruce Mathieson adding AU$50m ($30m).
Cashing in
Star reportedly expects to receive the cash up-front from Bally’s and Mathieson by week’s end to meet its near-term financial obligations.
While the acquisition will give Bally’s control of The Star, Sydney; The Star Gold Coast; and The Star Brisbane; it also handed the Aussie casino giant a lifeline.
only had enough cash to last it one week
On Wednesday, Star allegedly only had enough cash to last it one week after an AU$940m ($563.9m) offer from property development fund Salter Brothers Capital fell through over lack of a binding debt commitment letter.
Star was facing imminent collapse with around 9,000 jobs across its Australia properties at risk. Its eventual saviour Bally’s threw its hat into the ring in March, a bullish, last-minute move by the Soo Kim-owned brand.
At the time, Bally’s challenged a move by Star’s Hong Kong partners to acquire a 50% stake in its Brisbane integrated casino-resort, calling its offer “an alternative path.”
What next?
Bally’s now needs approvals for its acquisition of controlling interest in Star from the Foreign Investment Review Board and casino regulators in NSW and Queensland.
Approval seems guaranteed given Bally’s US pedigree in the gambling industry and that it already runs 19 casinos acquired via “distressed sales.”
charm offensive while inspecting Star’s casinos
Chairman Kim also went on a charm offensive while inspecting Star’s casinos earlier this year on what he termed a “mystery shopping” experience.
Kim stated that Bally’s was “almost struggling to understand” why Star’s Sydney casino was “performing so poorly.”
