Shares in embattled gambling company Star Entertainment Group (ASX:SGR) are up 23% to 56cps in lunchtime trades on Monday as the company confirms it’s in discussions with interested parties potentially ready to offer a takeover bid.
Key to its announcement today is that Star has confirmed Florida-based international consumer brand Hard Rock is involved in discussions.
One national masthead reported this morning that Star had received notice of Hard Rock’s interest in potentially acquiring the company.
Today, Star said that it “had not received a proposal directly from Hard Rock” but then went on to clarify that Hard Rock is part of a consortium of other entities looking at a “potential transaction.”
The upward share movement reflects a level of enthusiasm in the Australian marketplace – with a takeover likely seen as preferable to a continued struggle in the onshore landscape.
Star’s 1Y returns are down -51.4% YoY and compared to the wider consumer index, it’s underperforming by -66.8%.
However, Star is among the leading companies in this sector – its market cap is $1.5B.
In the background, the NSW government has been conducting an inquiry into Star Entertainment Group particularly with a regard to the company’s casino licences.
The findings of that inquiry haven’t been particularly compelling for investors, though, the stock is still up more than 10% YTD as at 12.40pm AEST on Monday.
The company appears that it may lose its casino licence in NSW.
SGR last traded at 56cps.