The Star Entertainment Group raises $490m in share placement with joint venture partners

THERE’s been a half billion dollar shuffle in who owns The Star Entertainment Group this morning. The deal will affect the company’s biggest projects including the five tower revamp of the Broadbeach casino and Main Beach’s Sheraton Grand.

The masterplan for The Star Gold Coast includes up to five residential towers. Photo: Supplied

THE partners of The Star Entertainment Group’s biggest projects have become some of the company’s biggest owners in a $490 million share purchase deal announced this morning.

The Group will place 92.65 million new shares at $5.35 per share, allocating half each to Chow Tai Fook Enterprises and Far East Consortium.

The price is slightly lower than the $5.39 it was trading at 10am today.

The deal means the two groups will have 45.8 million shares each, or a 4.99 per cent stake once the new shares are added to the books.

No changes to the group’s board have been flagged.

The deal increases investment by the two companies in The Star to $3 billion.

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The Star Gold Coast masterplan.

The Star chief executive Matt Bekier says the marketing alliance in particular will benefit The Star.

“I think our future really is closely tied to the growth of Asian tourism,” he told AAP on Thursday.

“And us being able to work with these large partners to build marketing capability and access a large customer base in those areas — that is, in fact, transformative.

“The additional property development — that’s great to have — but we would have gotten to that over time anyway.”

They already have joint venture projects including The Star Gold Coast’s residential development of up to five towers, the purchase of the Sheraton Grand at The Spit and the mammoth Queen’s Wharf Development in Brisbane.

Brisbane’s Queen’s Wharf project.

Despite their increased stake, CTF and FEC will not be allowed to increase their voting power above 19.9 per cent.

Their new shares will start trading shortly after April 16.

Under the deal, the new owners will also form a marketing alliance with The Star, which aims to boost the group’s VIP and premium customer base through their networks in China and Hong Kong.

The Star Entertainment Group has released its $850 million master plan for the Gold Coast to seek public comment on the development.

In a statement to the ASX this morning, The Star chairman John O’Neill AO welcomed the companies’ extended involvement.

“Our expanded strategic partnership recognises the strength of our relationships built over the last four years and the shared vision of investing in properties with valuable long-term licences in sought after destinations,” he said.

“The complementary skills and businesses possessed by each partner have contributed over the past four years to creating long-term value for all shareholders, commencing with Queen’s Wharf Brisbane.

“More recently, The Star, Chow Tai Fook and Far East Consortium have jointly participated in the acquisition of the Sheraton Grand Mirage Gold Coast and plans to develop the first joint venture tower as part of The Star Gold Coast masterplan.

“This deal ensures a greater strategic and economic alignment of our collective interests, and continues The Star’s commitment to deliver growth investments through a capital efficient structure.

“In light of the group’s strong financial outlook, the Board has also increased the target dividend payout ratio to a minimum of 70 per cent of normalised net profit after tax, commencing from FY2018 final dividend.”

The Star’s last dividend, paid on March 14, was 7.5c franked.