Bally’s Mulled Waiting for Star to Fall Into Administration

Posted on: April 14, 2025, 09:43h. 

Last updated on: April 15, 2025, 09:55h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.
  • Regional casino operator decided to bid amid fears Star would have been too difficult to rescue in administration
  • Kim says Bally’s had been monitoring th Star situation for a year.

Bally’s (NYSE: BALY.T) considered waiting for Star Entertainment Group to be placed into administration, but opted to proceed with a $188 million takeover bid for the Australian casino operator for fear it would have been too difficult to rescue it as a ward of the government.

Star Entertainment, Oaktree Capital Management, debt refinancing
The Star Sydney. Bally’s considered waiting for Star Entertainment to fall into administration before bidding for the company. (Image: Star Entertainment)

Bally’s Chairman Soo Kim told Reuters the regional casino operator was compelled to make a takeover offer — in partnership with Australian pub baron Bruce Mathieson — when it saw Star moving to sell assets. Those transactions include a deal to sell its Sydney conference and a now-scrapped plan to unload the Star Brisbane casino resort.

We thought about waiting for voluntary administration but we thought, given there was a fire sale of assets, there might not be anything left if administration was to come,” Kim told Reuters.

Kim is the founder of Standard General, the hedge fund that’s the majority owner of Bally’s. The US gaming corporation made its initial bid for majority control of Star last month, and it was accepted on April 6 after the Australian company ran out of financing options.

Other Considered Same Move

Nearly as soon as the calendar turned to 2025, fears mounted that Star was in danger of imminent collapse and that it would be forced to ponder voluntary administration.

According to various reports, Bally’s wasn’t the only prospective bidder who considered waiting for that to happen. Rumors indicate at least one major US private equity company was mulling a run at Star on the expectation it would become a government-controlled entity. That scenario may have been prevented by Bally’s and Mathieson teaming up to rescue the gaming company in which Mathieson is the largest shareholder.

One of the selling points of Bally’s offer is that it allows Star to remain intact without the need to sell valuable assets simply to remain afloat. The US gaming company and Mathieson have already contributed about a third of the total purchase price, which will keep Star alive for at least 15 months, and are waiting on regulatory approval to inject the rest of the capital.

It may have been risky for Bally’s to wait on Star to land in the hands of the government, and doing so likely would have made a deal for all three of the company’s casinos trickier.

“This came together quickly this year but we had been looking at it for well over a year. When we saw the company start to sell their proverbial furniture, burn the furniture for firewood we decided to move,” Kim told Reuters.

Bally’s Living Up to Reputation

On at least two fronts, Bally’s is living up to its reputation. First, the company was built on acquisitions. That’s how it came to run 19 casinos in 11 states.

Second, it purports to be a turnaround specialist in the gaming industry, scooping up unloved or underperforming assets to improve efficiencies and profits. Kim told Reuters that reputation makes Bally’s a go-to conversation for troubled operators.

Prior acquisition and turnaround successes aside, Bally’s could face challenges in Australia as regulatory challenges remain, and some analysts believe the operator could be required to later infuse more capital into Star.