Foundation Theatres finalized the purchase of the Star Sydney Event Centre yesterday (April 8). The deal also includes other additional spaces within the Star Sydney complex.
The deal was completed following regulatory approval from the New South Wales Independent Casino Commission (NICC). This allowed the $60 million exclusivity fee to be released to Star.
However, the NICC has proposed certain conditions as part of its approval. This includes the $58.1 million in proceeds from the sale to be held in escrow. The NICC said this can only be released once Star shareholders approve the $300 million strategic investment announced this week by Bally’s.
A shareholder meeting is due to take place in late June. Should shareholders not approve the deal, Star may request the funds be released in escrow, subject to meeting certain financial viability conditions.
Bally’s Steps in at Star
This week, Star agreed to a last-ditch buyout offer from the U.S. operator. Bally’s has shown an interest in Star for several months now and, if approved, its investment would see it take up to 56.7% of Star’s shares.
Bally’s is set to provide an initial $100 million injection by today, without need for shareholder approval. This will convert to approximately 15% of shares, as well as $66.6 million in subordinated non-convertible debt.
As for the second tranche of $200 million, this will require approval from shareholders, as well as regulators. It could, however, be split into halves of $100 million to speed up the process.
Bally’s established itself as the frontrunner for Star after Salter Brothers Capital last week withdrew a refinancing proposal. This would have made up to $592 million available to the troubled operator.
Star said it worked “diligently” with Salter Brothers and held talks with several third parties including state governments and regulators. However, it was unable to come to a final arrangement and the proposal was shelved.
