Hard Rock not interested in Star

Hard Rock International is denying it has anything to do with a proposed takeover of Star Entertainment, contradicting a statement from the troubled casino operator.

The Star in Sydney facing regulatory challenges. John Feder

Hard Rock International has vehemently denied takeover interest in Star Entertainment, dashing hopes a well-financed global brand would rescue the troubled casino operator.

Star shares slumped almost 8 per cent on Tuesday after Florida-based Hard Rock threatened legal action against any entity using its name in relation to a bid for the Australian firm.

The previous day had seen Star shares soar 20 per cent on hopes a consortium that included a company called “Hard Rock Hotels & Resorts (Pacific) would lodge a bid.

Market analysts said any takeover bid for Star would be complex and uncertain given its continuing financial challenges and the possible loss of its Sydney casino licence.

Adam Bell, SC, is conducting his second inquiry into Star’s suitability to hold a casino licence in Sydney, following a probe in 2022 that found it had not met its obligations to prevent money laundering and other mis­conduct.

In a statement released Monday night, Hard Rock International said it wanted to “make it clear” that it is not involved in, nor has it authorised, any discussions, activities or negotiations on its behalf in connection with a proposed bid for Star.

“Hard Rock International has similarly not authorised the use of the Hard Rock brand in connection with any proposed bid for Star by any third party,” it said.

Hard Rock said it was currently investigating “this matter and will pursue all necessary legal actions to protect our brand and reputation.” “We urge stakeholders to rely only on official communications from Hard Rock International for accurate information regarding our business activities and partnerships,” the company said. “Any misuse of the Hard Rock name in unauthorised business dealings is taken very seriously.”

Hard Rock International did not respond to a request for further comment on the identity of Hard Rock Hotels & Resorts (Pacific). Hard Rock International, which operates over a dozen casinos across the US along with a string of cafes and hotels, is owned by the Seminole Tribe of Florida with annual revenues of US$5.9bn.

Founded by Isaac Tigrett and Peter Morton in 1971, Hard Rock’s current chief executive, Jim Allen, led the Seminoles’ 2007 acquisition of the firm, the first acquisition of a major international company by a North American Indian tribe.

Hard Rock has denied interest in Star.

Star confirmed on Monday that it had “received inbound interest from a number of external parties regarding potential transactions.”

It clarified it was not the recipient of a direct proposal from the global firm but had received “inbound interest from a number of other external parties including a consortium of investors” that included Hard Rock Hotels & Resorts (Pacific).

In a statement, Star on Tuesday said it “notes” Hard Rock International’s statements and reiterated that it did not receive any proposal “directly” from Hard Rock International. It confirmed it received “an incomplete and indicative proposal from a consortium of investors which included the entity ‘Hard Rock Hotels & Resorts (Pacific).”

“The Star confirms that it has not engaged in substantive discussions with the consortium in respect of its proposal,” it added.

In a note to investors Macquarie said any transaction would need the support of Star’s major shareholders including pokies king Bruce Mathieson, and its Queen’s Wharf joint venture partners Chow Tai Fook and Far East Consortium. who together hold a combined 16 per cent stake in the company. Mr Bruce Mathieson Jnr declined to comment.

“Star has attractive long-duration casino licences, but there are significant near-term uncertainties on earnings, and a long list of outstanding issues which need to be cleared before we can get comfortable with the investment thesis,” said Macquarie. Macquarie said any takeover proposal would be highly conditional on probity approvals, the outcome of the Bell II inquiry and debt refinancing of Queen’s Wharf.

Morningstar analyst Angus Hewitt said some global players were “sensing an opportunity amid the chaos.” But Mr Hewitt noted Star, already battered and bruised from increased regulatory scrutiny in both New South Wales and Queensland, was facing the possibility of having to close its doors in Sydney.

”A complete refresh of the board and executive team, which was supposed to win back favour with the regulator following the original Bell inquiry into Star’s suitability to hold a casino license, has all but failed,” said Mr Hewiit. “While shares in Star are materially undervalued, there is significant uncertainty surrounding the company.”