Hong Kong’s Chow Tai Fook Enterprises (CTFE) and Far East Consortium (FEC) have entered into a Subscription Agreement that will see each of them claim a 4.99% stake in Australian casino operator Star Entertainment Group as part of a new Strategic Alliance.
Under the terms of the Subscription Agreement, CTFE and FEC will each acquire 45.8 million new fully paid ordinary shares for a total consideration of AU$245 million each.
The companies also intend to submit applications to the NSW Independent Liquor and Gaming Authority and the Queensland Office of Liquor and Gaming Regulation to gain the right to increase their shareholding in The Star to over 10%. However, the Subscription Agreement as it stands limits their combined holdings to a maximum of 19.9%, subject to “certain exceptions.”
In a Thursday morning announcement, Star Entertainment Group said that the Subscription Agreement “underpins the strategic partnership and better aligns the interests of The Star’s strategic joint venture partners with the long-term growth and financial performance of The Star.”
Star, CTFE and FEC are already partners in the AU$3 billion Queen’s Wharf Brisbane development that is set to transform the city’s riverside entertainment precinct.
The Subscription Agreement forms part of a broader Strategic Alliance between the trio that includes a commitment by the parties to jointly pursue major growth developments in and around The Star’s properties in Sydney, Brisbane and the Gold Coast to increase their scale and appeal. The partnership will also establish a marketing alliance to drive high-end tourism.
As part of the Strategic Alliance, Star Entertainment Group will have exclusivity on any new Australian or New Zealand casino or gaming developments pursued by CTFE or FEC.
Among the expansion developments proposed as part of the Strategic Alliance is the development of a new underground train station alongside The Star Sydney in Pyrmont, in partnership with the NSW Government.
CTFE and FEC will also become involved in supporting and pursuing The Star Gold Coast Precinct Masterplan including up to five joint venture towers with potential for hotel and residential developments as well as expanded entertainment, tourism and retail developments.
Commenting on the new Strategic Alliance, Star Entertainment Group Chairman John O’Neill said, “The board welcomes CTFE and FEC as shareholders in The Star.
“Our expanded strategic partnership recognizes the strength of our relationships built over the last four years and the shared vision of investing in properties with valuable long-term licenses in sought after destinations.
“The complementary skills and business possessed by each partner have contributed over the past four years to creating long-term value for all shareholders, commencing with Queen’s Wharf Brisbane.
“This deal ensures a greater strategic and economic alignment of our collective interests and continues The Star’s commitment to deliver growth investments through a capital efficient structure.”
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