The Star Entertainment Group declines buyout offer from Chow Tai Fook, Far East Consortium
The embattled Star Entertainment Group has made a shock decision on an offer from its partners to buy out its Queen’s Wharf casino precinct. Read what they said
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
The embattled Star Entertainment Group has knocked back an offer from its partners to buy out its Queen’s Wharf casino precinct.
In a statement to the ASX Monday morning, The Star confirmed media reports that it had received “several confidential, indicative and non-binding proposals” from Chow Tai Fook Enterprises Limited and Far East Consortium International Limited, which owns a half share of the Destination Brisbane Consortium assets in the CBD.
“The Board of The Star has assessed each of the CTFE and FEC Proposals received to date, and after careful consideration (which has included external advice) concluded that none of the proposals have provided sufficient value for The Star,” the statement said.
“The Star continues to engage with CTFE and FEC to ascertain whether a sale of The Star’s 50 per cent interest in DBC can be negotiated on terms satisfactory to The Star.
“There is no certainty that any transaction will be concluded.”
Shares in the Star rose 9 per cent, from 10c to 12c, in the first hour of trading on Monday.
The statement said “material uncertainty” remained in whether it would continue as a going concern amid a multi-front financial battle with lenders and Government fines and restrictions.
“The Group continues to explore possible liquidity solutions,” it said.
“While discussions continue with respect to a range of different solutions, there is no certainty that any of these discussions or negotiations will result in one or more definitive arrangements that might materially increase the Group’s liquidity position.”
The consortium partners also hold a 60 per cent share of The Star Gold Coast’s assets.
The Star has faced pressure from lenders, anger from shareholders, ambiguity from governments and increased gambling regulations which were drastically increasing costs.
The group made almost $300m less in the second quarter of the financial year than in the first quarter, despite revenue growing at The Star Gold Coast.
The embattled group – and its 9000 staff – had been increasingly on edge since announcing the company had spent more than $100m cash in three months.
The announcement came as a six-week trial of former Star executives alleging they breached money-laundering controls and didn’t fulfil corporate fiduciary duties began in the Federal Court.
The Australian Securities & Investments Commission (ASIC) launched proceedings against 11 current and former Star executives and directors in 2022 for various breaches of the Corporations Act, which can attract individual penalties of up to $1.56m.
The Star revealed its latest financial results on January 20, noting a “material uncertainty” over its ability to stay afloat.
Star CEO Steve McCann last month said the group could return to profitability if given more “time and support”, but was realistic about the enormity of the turnaround task.
The Star made a financial provision of $399.5m in 2024 – which it hoped would cover the Austrac fine as well as a suite of other fines, underpaid taxes, ASIC proceedings, a looming class action, consultant costs and legal fees.
It had also been in a battle to keep its Queensland casino licence and to refinance $1.6bn of its debt for Queen’s Wharf.
‘Unfortunate incident’: Gold Coast cafe reopens after arson attack
Less than a fortnight after being significantly damaged in an arson attack, a Southport cafe has returned to service, as police share new information about the case.
Stronger together: Behind Ryan Stokes’ billion dollar bet
Where the trend in business is to slim down, spin-off and simplify, Ryan Stokes has been going in the other direction.