Hard Rock International distanced themselves from reports about a possible Star Entertainment acquisition, and denied any involvement in activities or negotiations relating to an offer.
Yesterday (20 May), local reports in Australia said that Hard Rock is part of an investment group looking to buy Star. Australian Financial Review reported that Star’s land-based casino properties would be rebranded under Hard Rock if the deal went through.
Star responded to these reports by stating that it has received “inbound” interest from various external parties regarding potential transactions. Star said that the interest was unsolicited and preliminary, but not binding. It also stated that it is an uninvited, non-binding approach.
Star also mentioned its links to Hard Rock and said it hadn’t received any proposals directly from that group. The Star did mention that a consortium featuring Hard Rock Hotels & Resorts Pacific Regional Division of Hard Rock was interested.
Hard Rock’s response has been to deny any involvement in the rumours. Hard Rock also stated that it had not authorized the use of their brand to promote any proposal from a third party.
Hard Rock International said: “We would like to clarify that Hard Rock International has not authorized, or been involved in any discussion, activity, or negotiation on its behalf, in relation to a potential bid for Star.”
Hard Rock International also has not authorized the use of its brand to promote any bid by a third party for Star.
Hard Rock may pursue legal action regarding the matter
Hard Rock went on to say that it would take any abuse of its trademark “seriously”, and could even consider legal action.
Hard Rock stated that “Our brand was built upon a legacy based on integrity, excellence, and commitment to guests, team members, and partners worldwide.” Hard Rock takes any misuse of its name for unauthorised commercial dealings very seriously.
We are investigating the matter, and we will take all legal action necessary to protect our reputation and brand.
We urge the public and stakeholders to only rely on Hard Rock International’s official communication for information about our partnerships and business activities.
Star responded to the announcement. The company stated that they have not had substantive discussions about the proposal with the consortium.
The company said: “The Company today takes note of the Hard Rock International statement which clarifies Hard Rock International has not been involved, nor has Hard Rock International authorized, any discussion, activities, or negotiations in its behalf with respect to a Star proposal.”
Star will inform its shareholders in compliance with its ongoing disclosure obligations.
Hard Rock M&A in other places
Hard Rock has not made any moves to acquire Star in the past months, despite its apparent lack of interest.
Hard Rock Digital, the Hard Rock Digital division of the company, struck a deal in March to purchase certain B2C assets aimed at US consumers from 888. Details of the assets Hard Rock plans to purchase are not yet known.
The deal will be completed in stages, according to 888. It had only begun its strategic review a few weeks earlier. The sale is expected to be completed by the end of this year’s Q4.
Star faces uncertain times as Bell Two Inquiry begins
Star, the company that has suffered in the recent past from financial problems, would have welcomed a possible investment.
The second Bell investigation was launched in February. It focused on Star’s activities and the fallout from the Bell Report. The second Bell inquiry focuses on Star’s culture and finances.
Star released some positive news last week in relation to the Bell Two investigation. Queensland authorities announced that Star’s licence suspension plan in Queensland has been delayed.
Star received a sanction in Queensland, Australia in December 2022 for a number of failures. The operator was slapped with a fine of AU$100.0m (PS52.4m/EUR61.3m/US$66.6m) and informed its licence would be suspended.
Star had 12 months in the beginning to fix issues and demonstrate that it was eligible for a license. Star’s remediation plan was submitted to Star in May of this year, pushing back the deadline from 1 December to 31 may.
This deadline was extended to the 20th of December this year. The Queensland government wanted to wait until the Bell Inquiry was completed before making any decisions on the license.
Star’s new top tier
Star is not immune to uncertainty. Star has lost several key personnel in recent months. The replacements have not yet been announced.
Robbie Cooke, Group CEO and managing director left the company in March. Christina Katsibouba was named chief financial officer. Jessica Mellor, the CEO of Star Gold Coast is also stepping down.
David Foster also announced that he would be stepping down as the executive chairman. Foster, who had assumed additional duties after Cooke left as CEO, announced his departure.
Star also published last month a Q3 trading update. The Q3 trading update showed that Star had a loss of only $6.8m compared to the loss of $49.7m in the prior quarter.
The revenue in the third quarter fell by 4.6%, to EUR419.2m. Normalised EBITDA also dropped to US$37.9m.
