Bally's Corporation enters into a binding agreement with The Star for AUD 300 Million Strategic Capital Investment via Convertible Notes and Subordinated Debt

Core Viewpoint - Bally's Corporation has entered into a binding term sheet with The Star Entertainment Group for a strategic capital investment of AUD $300 million (approximately USD $187 million) through subordinated convertible notes and subordinated debt, aimed at revitalizing The Star's operations and enhancing its long-term potential [1][4][7]. Transaction Details - The transaction involves a multi-tranche issuance of notes, with Bally's potentially owning up to approximately 56.7% of The Star's fully diluted share capital upon conversion of the notes [5][7]. - The first tranche includes: - Tranche 1A: AUD $22.3 million (approximately USD $13.9 million), convertible into shares representing 9.71% of The Star's pre-issue capital [7]. - Tranche 1B: Convertible into shares representing 4.85% of The Star's pre-issue capital [7]. - Tranche 1C: Subordinated non-convertible debt of AUD $66.6 million (approximately USD $41.5 million) [14]. - The second tranche (Tranche 2) is valued at AUD $266.6 million (approximately USD $166.2 million) and is convertible into shares representing 50.3% of The Star's pre-issue capital [14]. Strategic Intent - The transaction is designed to support The Star's turnaround and long-term sustainability, leveraging Bally's operational expertise to enhance business resilience [4][5]. - Bally's aims to restore The Star's position as a leading gaming destination in Australia, with a commitment to collaborative efforts with regulators and stakeholders [4][5]. Regulatory and Approval Process - The issuance and conversion of the notes are subject to shareholder and regulatory approvals, with a shareholder meeting expected in the coming months [6][8]. - A Bally's representative will join The Star's board as an observer during the interim period [6]. Company Background - Bally's Corporation operates 19 casinos across 11 states in the U.S. and has a growing international presence, including the acquisition of Aspers Casino in the UK [12]. - The Star Entertainment Group is a leading Australian gaming company, operating properties in major cities and employing approximately 8,000 team members [3][10].