Star Entertainment May Be Acquired by Hard Rock and Other Companies
Star Entertainment's stock value increased on Monday after rumors surfaced that organizations linked to Hard Rock International and other gaming companies might be considering buying the Australian casino operator.
The Australian Financial Review was the first to report on this potential deal, revealing that a group headed by Hard Rock - part of Florida's Seminole Tribe - and unidentified groups have looked into offering for Star. However, other sources indicated that Hard Rock isn't specifically pursuing Star. In a statement to the Australian Securities Exchange (ASX), Star revealed they hadn't gotten a direct offer from Hard Rock.
Although Star confirmed the presence of other interested parties, including Hard Rock Hotels & Resorts (Pacific), the company shared that none of these potential suitors had engaged in meaningful discussions.
Star Entertainment - A High-Risk Proposal for Suitors
Star is currently dealing with a long-running anti-money laundering investigation and might lose control of its primary location - The Star Sydney - if this probe continues. The Australian government has managed this casino since 2022.
After the initial Bell inquiry, the casino operator was left without its gaming license and faced a whopping AU$65 million fine from regulators. The second Bell inquiry is currently underway to determine if Star has made progress on its money laundering precautions. The New South Wales Independent Casino Commission (NICC) said it's not satisfied with Star's advancements. Star itself has asked the government to keep running The Star Sydney, assuring that it's not yet ready to handle the responsibility again.
The report from the second Bell inquiry is set to be released on July 31, and its effects on Star's other two venues - The Star Brisbane and the Star Gold Coast - could create more confusion over what a buyer would truly obtain. The Australian Financial Review mentioned that Hard Rock is willing to cooperate with Australian regulators and could aid Star in reducing its reliance on gambling while emphasizing non-gaming facilities.
"The Star remains focused on its remediation activities in New South Wales and Queensland and participating in the Bell Two Inquiry," noted the operator in their ASX filing.
What Might've Been
If not for the regulatory uncertainties, management changes, and substantial debt, Star would be an attractive takeover target for various investors. It's among the biggest gaming operators in Australia and frequently welcomes wealthy Chinese tourists on their gambling journeys.
The blend of issues could either scare off potential buyers or stimulate more bidders interested in potentially manipulating Star's predicament.
Hard Rock, on the other hand, isn't new to operating casinos outside the US. They presently run a casino in Ontario, Canada, a casino hotel in the Dominican Republic, and are developing an integrated resort in Athens, Greece.
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Source: www.casino.org
