The kindest thing to do with Star is to find it a new owner

There has been a certain inevitability about where Star casino finds itself – with corporate jackals circling the wounded gaming company. It could be that the kindest thing to do is let them at it.

The Star has now officially conceded it has received approaches from outside parties – albeit they are unsolicited and non-binding. But the attention was serious enough to prompt Star to temporarily halt trading in its shares.

It’s raining predators for The Star casino.Credit: Dion Georgopoulos

The company confirmed a bit of detail on one such suitor, a consortium containing Hard Rock Hotels and Casinos. It has plans to inject some capital into the company, turbocharge the image of its casinos as entertainment destinations (rather than as gambling pits) and hive off its property assets, according to The Australian Financial Review.

The Star is a company that, in its pre-COVID heyday and in the era before being outed by regulators for a long list of misconduct, was trading north of $5. But until this week, when news slipped out that predators were circling, it was trading at around 45¢ and was worth about $1.5 billion.

Under normal circumstances, potential corporate activity would galvanise the board and senior management of any corporate prey into battle mode.

But the governance ranks of Star Entertainment have been decimated, leaving the castle’s battle turrets largely internally unmanned. Investment bank Barrenjoey Capital will advise Star, but who will it be briefing?

If ever there was a corporate mess, Star is it. It is financially and regulatorily challenged with no certainty that it will regain any of its three licences.

Currently, the roles of chief executive and chief financial officer are inhabited by seat warmers while the new chairman, Anne Ward, has barely put her feet under the desk thanks to the mass removal/defection in the wake of the Star NSW’s second inquiry into its suitability to hold a licence.

The problems unearthed in the current and second inquiry into Star’s suitability to hold a licence raise questions on whether any of the current directors have the credentials or mandate to oversee the company’s transition to a cultural cleanskin with appropriate processes.

Speculation has swirled that the executive brought in to to rehabilitate Crown after it was found unfit to hold its casinos licences, Steve McCann, could repeat the magic at Star. Whether he is keen to chance his luck again at cleaning up another casino group is another matter.

If ever there was a corporate mess, Star is it. It is financially and regulatorily challenged with no certainty that it will regain any of its three licences in Sydney, the Gold Coast and Brisbane.

Hard Rock isn’t the only player attracted to Star. There has been some speculation that Blackstone, which owns the Crown casino once controlled by James Packer, might also take a look at its main Australian competitor.

It is an obvious candidate given such a combination could dominate the Australian casino landscape and generate synergies. But Blackstone, which overpaid for Crown, has bitten off plenty and still has much to digest, so it may not have the stomach or the approval from its investors to double down here.

Star Entertainment’s largest shareholder, and arguably a natural owner for the casinos, is pub baron Bruce Mathieson. He could partner with someone or attempt to cherry-pick one of the casinos inside the Star.

Whatever happens, his near 10 per cent stake will be pivotal in the outcome of any corporate move on Star.

Any offer for all or parts of Star would need to be conditional on the company being found suitable to hold its licences.

And while the betting is that this is the most likely outcome, it is by no means certain. In the near term, Star in NSW will be found unsuitable currently and it will retain an external manager who will hold the licence until its rehabilitation is complete.

But who knows how long that will take?

Read more:

• Chaos, paranoia and overreaction: Robbie Cooke’s tortured Star turn
• Financially crippled Star gets salt rubbed into its wounds
• The Star Gold Coast boss quits as cracks in casino culture deepen

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