Star Entertainment Confirms Getting Queen’s Wharf Bids

At the beginning of February, it was rumored that private equity giant Blackstone was considering taking over Star Entertainment once the Australian group was placed into voluntary administration. 

Now, the ASX-listed owner and operator of The Star Sydney, The Star Gold Coast, and Treasury Brisbane has confirmed it was pondering several proposals for its stake in the freshly opened Queen’s Wharf casino in Brisbane.

Local reports, however, have suggested that the company has turned down multiple bids from foreign investors and potential buyers interested in acquiring its key assets.

Forced to Start Selling

The interest expressed in the group coincides with a difficult time for the operator grappling with financial distress.

Star’s financial woes have worsened over the past year, when the company began experiencing a severe revenue drop and serious liquidity problems. 

In a recent move, Star sold its Sydney casino’s events space at a substantial A$40 million (US$25 million) loss compared to its previous valuation. 

Additionally, the company offloaded the real estate associated with its former Treasury Brisbane Casino operations.

No Deal Is Guaranteed 

The Queen’s Wharf development has become a focal point for potential sales, given Star’s 50% ownership stake. 

The remaining shares are held by Hong Kong-based Chow Tai Fook Enterprises (CTFE) and Far East Consortium (FEC), each with a 25% stake. 

Reports indicate that these investors have expressed interest in acquiring full control of the US$3.6 billion world-class precinct expected to “place Brisbane on the map as a tourism, leisure, and entertainment destination.” 

The Australian group confirmed to shareholders that it has received and studied a few acquisition proposals for its stake and other assets. 

However, the board rejected the offers, stating they failed to deliver sufficient value. While discussions with CTFE and FEC continue, Star emphasized that no deal is guaranteed.

Star initially started working with the two companies in 2015 to develop Queen’s Wharf. The original budget was set to A$2.6 billion (US$1.63 billion). 

Since then, costs have surged by roughly A$1 billion (US$627,000), adding even more problems to the list. 

Legal Troubles 

Alongside its financial struggles, Star is facing intense legal scrutiny. Former executives, including ex-chief executive officer Matthias Bekier, former secretary and general counsel Paula Martin, and ex-chief casino officer Greg Hawkins, are under investigation by the Australian Securities and Investments Commission (ASIC).

They are accused of failing to address risks associated with junket operators linked to organized crime between 2016-2022.

ASIC claims the named executives placed profits above regulatory compliance, enabling illegal activities like money laundering to persist within Star’s Sydney, Brisbane, and Gold Coast casinos. 

Additionally, they allegedly misled the National Australia Bank about how China UnionPay debit cards were used for gambling transactions despite explicit prohibitions.

The legal proceedings are expected to be prolonged, with opening submissions alone scheduled to last three days. ASIC is likely to seek financial penalties and corporate bans for those found guilty of misconduct.