The directors of casino and hotel group Star Entertainment have recommended that shareholders vote in favour of a rescue deal with Bally's Corporation and hotel industry billionaire Bruce Mathieson which an independent expert has found to be unfair.
The advice was in an Explanatory Memorandum sent to shareholders with notice of the meeting to be held in Sydney on 25 June 2025 to consider the deal.
Shareholders will be asked to approve investments in Star of A$200 million (US$130 million) by Bally’s and $100 million by the Mathieson’s family along with the issue to them of convertible notes.
Bally’s would own up to 53.7% and Mathieson’s up to 10.1% of Star if the transactions are approved and all notes are converted into shares.
Grant Samuel and Associates found in their Independent Expert Report that the terms of the transaction were 'not fair' for shareholders not associated with Bally’s and Mathieson but they had ‘compelling reasons’ to approve it.
The report also disclosed if the deal went ahead and Bally’s and Mathieson take control of the Star Board it would trigger a $6.2 million payment to Managing Director and CEO Steve McCann.
Star needs the rescue package to be approved because it is running out of money and facing the prospect of being unable to meet its debts and falling into administration due to ongoing losses, among other issues.
The company has already announced the sale of its 50% stake in the new Star Brisbane casino and resort to its joint venture partners Chow Tai Fook Enterprises and Far East Consortium International, which it hopes to complete by the end of June 2025.
At their latest price of 11 cents, which capitalises the company at $315 million, Star shares have lost 98% of their value over the last eight years.
