Australian casino company Star Entertainment has seen its stock price go on a roller coaster ride the last couple days, as rumors of a takeover have swirled. And the latest is not good.
On Monday, Star said that it was involved in “non-substantive discussions” with a consortium led by Hard Rock Hotels & Resorts (Pacific) to sell the company. Australian Financial Review reported that Star’s Board of Directors had received a proposal, which would see Hard Rock rebrand Star and refocus more on non-gaming revenue streams like dining and other entertainment.
Financial markets loved the news, as Star’s stock price soared 20% on the Australian Stock Exchange.
Not long thereafter, though, Hard Rock International denied any involvement in any sort of takeover bid. According to Bloomberg, the company never authorized the use of its brand in any possible offer.
As such, the validity of the reported proposal is in question. Additionally, nobody is quite sure who Hard Rock Hotels & Resorts (Pacific) even is. Reports Bloomberg: “A company named HPL Hotels & Resorts Pte Ltd. runs at least three Hard Rock-branded hotels in Southeast Asia — in Bali, Pattaya and Penang, according to its website. The site says HPL Hotels & Resorts is wholly owned by Singapore-listed Hotel Properties Ltd.”
But that’s all anyone really knows and it certainly doesn’t identify the people or companies behind the mystery Hard Rock Hotels & Resorts (Pacific). It doesn’t seem to be a part of Hard Rock International and if it is, there is some serious miscommunication going on.
On Tuesday, Star said that it has not received a proposal directly from Hard Rock International, reiterating that talks of an acquisition came from an “incomplete and indicative proposal from a consortium of investors which included the entity Hard Rock Hotels & Resorts (Pacific).”
After Hard Rock’s denial and Star’s wishy-washy statement, Star’s stock dropped over 7% on Tuesday and another 3% on Wednesday. It now sits at AUD$0.485 per share, not far off its 52-week low and well below its 52-week high of AUD $1.137.