By Mike Cherney

SYDNEY--American betting and entertainment company Bally's has offered to provide embattled Australian casino operator Star Entertainment with additional financing, in a deal that could help Bally's expand its international footprint.

Bally's would underwrite a capital raise of at least 250 million Australian dollars, equivalent to US$157.7 million, which would involve the issuance of convertible notes that could be changed into at least 50.1% of Star shares. Bally's would support allowing existing Star shareholders to participate in a significant portion of the offering on a pro rata basis.

Star, which is trying to stay in business after facing regulatory scrutiny and difficult trading conditions, said in a stock-market filing Monday that it would review the proposal from Bally's, but that there is no certainty it will be progressed.

Various suitors are jockeying for position as Star seeks to stay afloat. Bally's, which operates casinos in the U.S., interactive betting platforms and has a stake in a lottery business, argued that its proposal was superior to other financing offers disclosed by Star.

Star on Friday revealed several deals, including one in which it would give up its stake in a key casino development in Brisbane.

Bally's, which also recently acquired a casino in the U.K., added that it envisions partnering with Star to return the company to profitability and sustainability, noting it has significant experience in turning around casino assets.

"Our strategy for Star is built on the simple premise that keeping in place Star's current businesses, assets and platforms will provide a stronger and more successful business over time," Bally's said in a letter that Star posted to the Australian stock exchange.

Star plans to transfer its stake in the new Brisbane casino development to Far East Consortium and Chow Tai Fook Enterprises, its partners in the project, in return for up to A$53 million. The deal also involves Star getting full ownership of hotels at a development in the Gold Coast.

Star on Friday also said that it had agreed to a A$250 million senior secured bridge facility with funds managed by King Street Capital Management, and that it was seeking to progress another refinancing proposal that could provide a total debt capacity of up to A$940 million.

Although the proposal from Bally's is nonbinding, Bally's said it would work with Star to deliver a binding proposal shortly.

Star's shares were recently suspended from trading after the company failed to file an earnings report on time.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

March 09, 2025 21:42 ET (01:42 GMT)

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