Star break-up discussed by ‘Hard Rock’ investor, fund managers
The Brisbane developer behind a bid for Star Entertainment met investors to discuss a deal to break up the assets of the company and sell them to Florida-based Hard Rock International.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
The Brisbane developer behind a bid for troubled Star Entertainment met investment fund managers to discuss a deal to break up the assets of the company and sell them to Florida-based Hard Rock International.
The Australian understands Patrick Farrugia and another investor wanted to do a deal using a company called Hard Rock Hotels and Resorts (Pacific) to acquire parts of Star’s casino and hotels operation and then sell them to the hospitality giant, which owns a string of properties in the US.
“They did not claim to represent Hard Rock International but claimed they had some sort of exclusive right to deals in Asia-Pacific,” said one person with knowledge of the talks.
Mr Farrugia is believed to have had the backing of US-based Bainbridge Investments to fund the deal.
Sources said Mr Farrugia was not interested in acquiring all of the company, and talks about a deal had stretched back 18 months.
Star shares soared 20 per cent on Monday after speculation Hard Rock International was backing a bid for Star, which is currently mired in regulatory challenges following the end of the Bell II inquiry.
However, those takeover hopes were dashed when Hard Rock International said it was not interested in Star and that Mr Farrugia was using the Hard Rock name without authorisation.
Neither Mr Farrugia or his lawyer were contactable yesterday, throwing into doubt whether any serious bid will be forthcoming.
Mr Bell SC’s five-week inquiry into Star Entertainment has ended, with his final report expected by the end of July. Final public submissions were heard on Wednesday by Mr Bell, who will now recommend whether Star should retain its Sydney casino licence.
One person with knowledge of the talks with Mr Farrugia said there was strong interest in Star’s assets or the entire company as a going concern.
US-based casino operator Wynn and Australian super funds were among those that could tip their hat into the ring in pursuit of Star, he said.
Mr Farrugia, 63, who lives in a $12m mansion in the leafy Brisbane suburb of Clayfield, said on Wednesday that his companies had “longstanding arrangements with Hard Rock International across agreed territory jurisdictions”. Hard Rock International later denied any involvement in the bid and threatened to take legal action for unauthorised use of its name.
Star, which originally told the ASX that Hard Rock Hotels and Resorts (Pacific) was a local partner of Hard Rock, later clarified that it had not been approached by Hard Rock International.
Mr Farrugia was as an investor in the now defunct Hard Rock Cafe in Surfers Paradise and has been involved in hotel projects around Australia.
Star shares dropped 1 per cent to 48c on Thursday.
Originally published as Star break-up discussed by ‘Hard Rock’ investor, fund managers
‘Alarming trends’: Why this carmaker dumped EVs
Ineos Automotive – the carmaker which says it gave a home to 4WD ‘refugees’ – reveals why it has parked EVs and how it plans to win customers with big diesel and petrol engines.
Search for new QBCC comissioner rolls on
A bit over a month after QBCC commissioner Anissa Levy was told she no longer had a job the search continues for someone to run the building regulator.