Star Entertainment Accepts Bally’s AU$300M Rescue Deal

Australia’s embattled casino operator, Star Entertainment Group, received a lifeline from Bally’s Corporation early last month. At the time, the latter company proposed AU$250 million ($158 million) to help the former and become a major shareholder.

The announcement came after Star failed to disclose its six months results for the period ended December 31, 2024, acknowledging a cash influx would be necessary to complete that process. Now, on Monday, Star confirmed it has accepted an AU$300 million ($182 million) proposal from Bally’s.

The Strategic Investment Agreement Proposes Payment in Two Tranches

Details regarding the new strategic investment agreement emerged from an ASX filing from Star. The company’s statement reveals that it has “entered into a binding term sheet with Bally’s Corporation with respect to a multi-tranche convertible note and subordinated debt instrument with an aggregate principal value of AU$300 million.”

Per the announcement about the new binding term sheet, the two tranches will include a total consideration of AU$300 million ($182 million). This total breaks down to AU$100 million ($60.6 million) payment expected to be completed on or before April 9, 2025, subject to approval from the Star’s senior lenders.

Another AU$200 million ($121.2 million) is expected to be paid under the second tranche of the transaction. This payment, subject to approval of a shareholder vote and the necessary regulatory approvals, needs to be completed no later than October 7, 2025. An alternative option for the AU$200 million ($121.2 million) payment under tranche two is to be completed in two separate payments of AU$100 million ($60.6 million), with the first payment following shareholder approval and the second coming after the settling of regulatory approvals.

After the announced strategic investment, the Star’s Board now plans to unanimously recommend the proposal for an approval of the company’s shareholders. “The Board of The Star intends to unanimously recommend that The Star shareholders vote in favor of the Transaction, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the Transaction is in the best interests of The Star’s shareholders. Each Director of The Star intends to vote all of The Star shares that he or she holds or controls in favor of the Transaction, subject to those same qualifications,” reads the ASX announcement by Star.

According to Star’s announcement, the company employed the services of Allens as legal adviser and UBS Securities Australia Limited as a sole financial adviser for the transaction. The troubled operator confirmed that it is currently finalizing its financial accounts for the trading period that ended on December 31, 2024. The Star said that those accounts are expected to be lodged with ASX “as soon as possible.”