Making a move: The Star complex, operated by SEG, in Sydney. The bid aims to turn the Australian company into a business less dependent on casino income and more focused on entertainment, restaurants and hotels. — Bloomberg
SYDNEY: Troubled Australian casino operator Star Entertainment Group (SEG) says several suitors have approached the company about possible deals after a newspaper reported that a consortium led by Hard Rock Hotel & Casino made a takeover proposal.
SEG “has received inbound interest from a number of external parties regarding potential transactions”, the Sydney-based company said yesterday.
“At this stage, none of the approaches has resulted in substantive discussions.”
SEG’s statement followed a report in the Australian Financial Review that a group of suitors led by Hard Rock, operator of The Mirage in Las Vegas and other casino resorts in North America, had recently submitted an offer to Star.
According to the newspaper, the proposal included injecting fresh capital into Star, rebranding the company and separating its properties from the casinos.
SEG’s future in Sydney, home to the company’s flagship casino, is hanging in the balance as a fresh inquiry determines whether it has made enough progress in addressing wrongdoing to keep its gaming licence.
The casino has been run by a government-appointed manager since a damning report in 2022 found it had lax anti-money laundering controls, allowed patrons to flout China’s capital controls and encouraged problem gamblers.
A spokeswoman for SEG declined to comment beyond the company’s statement. Hard Rock didn’t respond to questions, the Australian Financial Review reported.
SEG chief executive officer and chairman resigned this year, and the company’s shares have tumbled 60% in the past 12 months. The company now has a market value of A$1.3bil (US$870mil).
It’s not clear what any successful buyer of SEG would end up owning.
SEG told the Sydney inquiry last week that it didn’t consider itself fit to operate the city casino in its own right.
It was argued that the current arrangement, which allows SEG to run the casino with an external manager, should be extended.
The Sydney inquiry’s final report is due on July 31.
Meanwhile, SEG’s two other casinos – on the Gold Coast and in Brisbane in the state of Queensland – are also operating under government caretakers.
Hard Rock is working with Australian and US investors on its SEG proposal and is being advised by KPMG, according to the Australian Financial Review report.
The bid aims to turn the Australian company into a business less dependent on casino income and more focused on entertainment, restaurants and hotels, the report said. — Bloomberg
