Star Entertainment’s mystery suitor scoops up more shares

Star Entertainment regained some market momentum on Tuesday after a Macau investor seemingly made the most of the casino owner’s dire share price and topped up his substantial stake.

Star confirmed in a notice to the Australian Securities Exchange that a Mr Xingchun Wang had lifted his ownership stake in the company from 5.52 per cent to 6.52 per cent.

Per ASX disclosures Mr Wang’s address is registered to Macau - a special administrative region of China colloquially referred to as Asia’s Las Vegas.

Disclosures also show Mr Wang has been invested in Star since late September 2024. He crossed over the substantial shareholding threshold on January 10, lifting his number of shares in the business to 158.3 million.

But Mr Wang won’t be able to own more than 10 per cent of Star, the company noted in its market announcement, due to rules agreed to with Queensland and New South Wales gaming authorities.

“The company may refuse to register any transfer of shares which would contravene these shareholding restrictions or require divestiture of the shares that cause an individual to exceed the shareholding restrictions.”

Through broker HSBC, he bought another $3.2 million dollars worth, or 28.7 million shares in Star on market at 11¢ apiece on January 13, as the market digested news regarding Star’s ailing finances.

The listed group revealed last week that it had about $79 million available in the bank as it struggled with weak trading activity at its casinos, fines dished out by AUSTRAC and New South Wales regulators, as well as day-to-day expenses and outflows linked to shoring up new, much-needed debt funding.

Morningstar analyst Angus Hewitt pointed out that Star would struggle to make it to the end of February without a financial lifeline, and factored in a 50 per cent chance the company might go into administration.

The financial services group slashed its valuation of Star by 60 per cent in a move it said reflected “severe liquidity concerns”.

Potential lifelines included raising equity — which Morningstar said the casino group would struggle to do — selling individual assets, or finding a potential buyer.

“Star needs a more immediate solution, and we believe it is unlikely it can trade itself out of this predicament.”

Star shares were up 12 per cent to 14¢ on Tuesday after hitting an all-time low of 10¢ last Friday.

The stock is down about 72 per cent since January 2024.