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US casino giant Bally’s Corporation and Australian pubs baron Bruce Mathieson have taken control of The Star Entertainment Group (ASX: SGR) board in a shake-up that has led to the resignation of Anne Ward as chair.
Ward, who has been chair of The Star since April last year and a board member since 2022, has been replaced by Bruce Mathieson Jnr.
An announcement by The Star after the market closed revealed that Mathieson vehicle Investment Holdings Pty Ltd had lifted its interest in the casino operator from 9.59 per cent to 23.16 per cent.
The move follows regulatory approval granted on 21 November by the NSW Independent Casino Commission (NICC) and the Queensland Office of Liquor and Gaming Regulation (OLGR) to allow Bally’s and Investment Holdings to convert their $300 million rescue funding of The Star via convertible notes into equity.
Bally’s will control about 38 per cent of The Star’s shares once its notes are converted, giving the new investors at least 51 per cent of The Star’s issued capital although this could ultimately move to 61 per cent.
Bally’s chair Soo Kim and president George Papanier have also been appointed to the board in the wake of the regulatory approvals for the rescue deal.
Ward joined The Star following a mass resignation of the company’s board in the wake of the Bell inquiry in 2022.
Last year, she was appointed chair, replacing David Foster, who was acting as executive chair due to the earlier departure of Robbie Cooke as CEO. Both Cooke and Foster were revealed in the second Bell inquiry last year to have had a dysfunctional relationship with the NICC.
“On behalf of the board, I would like to thank Anne Ward and Deborah Page for their significant contributions to the board during a challenging period for The Star,” says The Star’s CEO Steve McCann.
“I would also like to welcome Soo Kim and George Papanier to the board and look forward to working with them to assist in shaping a new future for The Star.”
Ward alluded to her resignation at The Star’s annual general meeting held last week indicating that her re-election as chair was “only for a matter of days”.
New chair Bruce Mathieson Jr, who was appointed a non-executive director of The Star in October, has more than 30 years’ experience in the hotel, hospitality and gaming industries.
During last week’s address to shareholders, Ward said The Star is “on the cusp of a new era, with new majority shareholders, bringing new energy and fresh ideas to accelerate the transformation of your company”.
Shareholders were told that The Star’s FY25 performance had “materially deteriorated’ due to the impact of regulatory reforms, tighter due diligence processes for punters, as well as mandatory carded play and cash limits at The Star Sydney.
McCann pointed to the work ahead for the new board, including the company’s planned exit from the Brisbane casino.
The CEO affirmed that the sale of The Star’s 50 per cent interest in the Destination Brisbane Consortium, which developed the Queen’s Wharf project in the Brisbane CBD, to its Hong Kong partners has been delayed further.
The Star currently receives a management fee of $5 million per month to operate the Brisbane casino, but McCann revealed it costs the company “a bit more than that” to run.
Despite the support of new shareholders, The Star’s financial position remains precarious, with Ward telling shareholders last week that there were “critical milestones” ahead to ensure the business can survive as a going concern.
During the meeting, Ward even suggested that privatisation could be on the cards as a potential option for the group.
Shares in The Star closed 0.5c higher at 11c today.
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