The Star Revives Partnership with Hong Kong Investors to Exit Brisbane Casino

The Star Entertainment Group (ASX: SGR) has resurrected the deal to dispose of its Brisbane casino assets after finally securing a binding agreement with its Hong Kong partners to sell its 50 per cent interest in the Queens’s Wharf development.

Today’s announcement comes less than two weeks after the partners terminated a heads-of-agreement for the transaction after failing to finalise long-form documents by the 31 July deadline.

The Star says it has entered into binding long-form documentation with Chow Tai Fook Enterprises (CTFE) and Far East Consortium (FEC) to offload its interest in Destination Brisbane Consortium, owner of the $3.6 billion Queen’s Wharf development.

The deal will see The Star eventually relinquish management of the Brisbane casino to another operator ultimately chosen by CTFE and FEC.

The Star plans to consolidate its Queensland casino operations on its Gold Coast property, with the deal leading to the transfer of assets held jointly in Brisbane to the Hong Kong partners in return for assets held jointly on the Gold Coast being transferred to The Star.

The casino group says key aspects of the deal are “materially consistent” with the heads of agreement announced by The Star on 7 March 2025.

While the Brisbane exit is not the preferred option for Bally’s Corporation, whose investment in The Star has kept the group afloat, the US-based casino group has given the plan the nod.

“The Star has also received the consent of its subordinated lenders Bally’s Corporation and Investment Holdings Pty Ltd to support the transaction on the basis of the executed terms,” says The Star.

The Brisbane exit is proposed to be executed in two separate stages, beginning with the sale of The Star’s 50 per cent interest in Destination Brisbane Consortium which has a sunset date of 30 November 2025.

The sale of the remaining assets, including the Destination Gold Coast Consortium and The Treasury Hotel in Brisbane, is subject to separate conditions which The Star expects to be satisfied in the second half of 2026.

“Completion of each stage of the transaction is subject to satisfaction of all required conditions precedent in respect of each stage,” says The Star.

This includes the receipt of regulatory approvals and approvals from lenders to The Star and the various joint ventures.

Today’s announcement wraps up a tortuous process for The Star since announcing its plans to exit the Brisbane market earlier this year.

Under the terms announced in March, The Star was to receive a cash payment of $53 million for the transaction and in March received a much-needed upfront payment of $35 million.

However, the deal was still subject to long-form documentation which initially had been due by 30 April and finally extended to 31 July.

The contract was terminated after the parties failed to meet the extended deadline, although The Star had indicated in its most recent quarterly report that the parties were continuing negotiations despite acknowledging it was likely to meet the targeted deadline.

The certainty of a new deal pushed The Star’s shares more than 29 per cent higher this morning to 11.5c – up 2.6c at 11.33am.