Star Entertainment’s largest investor, billionaire pub and gaming magnate Bruce Mathieson, has thrown his support behind a buyout proposal from Bally’s Corporation, the American casino giant. The move comes as Star struggles to navigate financial troubles and regulatory challenges, leaving the company in search of a viable rescue plan.

Mathieson, who holds a 10% stake in Star, has committed to contributing over $50 million of his own funds if Bally’s offer moves forward. His endorsement shifts momentum toward the U.S. operator’s bid, which competes with an alternative deal Star had been negotiating with private equity firm Salter Brothers and its Hong Kong-based partners, Chow Tai Fook Enterprises and Far East Consortium.

Bally’s Makes a Bold Play for Star

Bally’s Corporation has put forward a $250 million offer in exchange for a 50.1% controlling stake in Star, asserting that its deal would allow the company to retain ownership of the newly developed Queen’s Wharf complex in Brisbane. Bally’s chairman, Soo Kim, remains confident that his firm can successfully steer Star through its current difficulties.

“It is not too late. Our proposal is not subject to due diligence or consents or anything. We can do this,” Kim stated according to Australian Financial Review. “Every deal we’ve done, people say ‘There’s no value there, or it is too hard.’ We are usually the buyer of last resort.”

Mathieson’s backing of Bally’s bid is significant, as he has already received regulatory approval to increase his stake in Star to 20%. If the bid succeeds, sources indicate he could secure board representation and an even greater role in the company’s future.

Star’s Alternative Deal Still in Play

Despite Bally’s aggressive push, Star has been prioritizing a separate agreement with Salter Brothers and its Hong Kong partners. That deal includes a $750 million refinancing arrangement and the sale of Star’s stake in Queen’s Wharf in exchange for two Broadbeach Island towers on the Gold Coast and $53 million in cash.

Additionally, Star has secured a $250 million bridge loan from U.S. investment firm King Street Capital Management, along with a planned $60 million sale of its Sydney conference center. However, obtaining full approval for the loan has proven complicated due to questions surrounding mandatory payments to King Street, regardless of whether the funds are drawn.

A Crucial Decision Looms

Bally’s proposal remains under consideration, though Star is restricted from formal discussions with the U.S. company until March 25 due to an exclusivity agreement with its current partners. The decision will significantly impact Star’s future as it attempts to recover from financial distress and ongoing legal issues.

With Star’s stock trading at just 11 cents as of February 28 and the company warning of a potential collapse earlier this year, the choice between Bally’s bid and its existing refinancing strategy is critical. Mathieson’s endorsement of Bally’s offer has added new pressure to the board as it weighs the best path forward.

“We have said from the beginning that our plan is the best way to preserve shareholder value,” Kim emphasized. “We look forward to working with Bruce to reinvigorate these great assets.”

As the March 25 deadline approaches, Star Entertainment’s fate hangs in the balance, with two vastly different strategies vying to shape its future.