Star Entertainment Group Ltd (ASX: SGR) is reported to have accepted a $250 million takeover offer from US-based Bally's Corporation in order to avoid a potential collapse.

The Australian reports that after a number of meetings held last Friday, the embattled casino has decided to accept the offer after a $940 million funding deal was withdrawn last week.

The agreement marks the end of a challenging period for Star as it narrowly averts administration, which would have threatened over 8,000 jobs across its operations in Sydney, Brisbane, and the Gold Coast.

Star Casino shares are currently suspended and were last at 11 cents apiece.

A lifeline for Star Casino?

As The Australian reports, Bally's Corporation, which owns 19 casinos across the US, is stepping in to secure Star's assets.

The deal involves Bally's acquiring at least a 50.1% stake in Star via a $250 million capital raise. Bruce Mathieson, Star's largest single shareholder, will also contribute more than $50 million to the deal, bringing the total package to $300 million.

The takeover plan is a vital development for Star. It has faced mounting pressure after failing to secure a rescue package from Melbourne-based Salter Brothers last week.

Starting all these financial difficulties? A combination of factors. One is the rising costs of its new Queen's Wharf integrated resort in Brisbane.

But mostly, it was the series of legal challenges over these past few years that underline the company's current standing. These include money laundering allegations.

This, coupled with the outcome of the Bell Two report, ultimately left the company on the brink of financial ruin.

Bally's, which has a reputation for swooping in to rescue struggling casino operations, aims to keep Star's assets intact rather than strip them, then sell them for parts.

Bally's CEO, Robeson Reeves, has stated that a unified approach will benefit all of Star's properties instead. Per The Australian:

We think that things tend to operate better if they're one larger organisation where you can actually generate benefits for each of the properties one by one by making one tweak in one place.

What's next for Star?

It's important to note that Star Casino hasn't confirmed or denied these reports at the time of publication.

One area of uncertainty is Star's ongoing partnership with Chow Tai Fook Enterprises and Far East Consortium in the Queen's Wharf precinct of Brisbane.

As The Australian Financial Review reports today, back in March, Star agreed to sell its 50% stake in the Brisbane project for $50 million.

Looking forward, Star's new owners will have to navigate not only the operational challenges at its Australian properties but also the ongoing legal scrutiny.

Time will tell what eventuates from all of this. But for now, there will be plenty more to come. Star last traded with a market value of just over $300 million. This means Bally's offer is below market.