Bally’s Corporation (NYSE: BALY) shares began the week on the downside. The company has entered into a binding term sheet with The Star Entertainment Group Limited comprising a multi-tranche issuance of subordinated convertible notes and subordinated debt with an aggregate principal value of AUD $300 million (approximately USD $187 million)
The Star is an ASX-listed, leading Australian entertainment and gaming company, operating casino and resort properties in Sydney, Brisbane and the Gold Coast. The Star employs approximately 8,000 team members while also supporting downstream employment and other opportunities in the communities in which it operates.
Bally’s will invest in and partner with The Star and bring a proven track record of revitalizing underperforming casino businesses. Bally’s will continue to work collaboratively with regulators and stakeholders to support a successful turnaround of The Star.
Strategically, the Transaction is intended to preserve The Star’s long-term potential, with Bally’s committed to leveraging its operational expertise to deliver a more resilient and sustainable business for all stakeholders.
Upon conversion of the Notes, Bally’s would own up to ~56.7% of the fully diluted share capital of The Star assuming it subscribes for 100% of the Notes, noting that The Star’s major shareholder, Investment Holdings Pty Ltd (which is controlled by the Mathieson family), may separately subscribe for a portion of the Notes, which would reduce Bally’s’ commitment by an equal amount.
BALY shares declined $1.82, or 14.2%, to $11.00.