Star Entertainment Group Ltd (ASX: SGR) shares are in a trading halt this morning as speculation gathers around potential bidders.
If true, the board might need to channel their inner Kenny Rogers: "Know when to hold 'em, know when to fold 'em, know when to walk away and know when to run". Both the former CEO and chair already decided to run, but will the struggling casino operator finally fold to an opportunistic offer?
With the Star Entertainment share price locked at 45 cents apiece today, we might have an answer sooner rather than later.
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'Hard Rock' or a hard place?
The proposition of taking control of Star at all-time lows appears to have prompted some action over the weekend. With its back up against the wall, the embattled Australian casino operator might have a way out of the web of worries it has walked into.
Star confirmed the rumours this morning. As stated in its release, the company has received interest from "a number of external parties regarding potential transactions". Although none are yet at a stage of 'substantive discussions'.
The release refrained from naming any names. However, word on the grapevine is that a fellow casino and hotel company on the other side of the world is one of those interested in taking over this troubled $1.3 billion ASX-listed business.
The Australian Financial Review reported that Hard Rock Hotels and Casinos is the suspected company inspecting Star shares for potential.
While not confirmed, it's believed the United States-based company wants to revitalise Star with a rebranding, converting it into more of an entertainment precinct than a casino pure-play. This comes after people from Hard Rock met with Star stakeholders about a month ago.
Agreeing to a takeover when your share price is at its lowest ever would be a tough pill for shareholders to swallow. But it might be the backstop investors need to prevent further value destruction. As my colleague Sebastian Bowen penned earlier this month, Star losing its license could devastate the company.
Hope for higher Star shares
There's always a silver lining. In this situation, the positive is multiple parties are taking a look.
As we've seen before, a bidding war can ensue when two or more bidders want an asset bad enough. If the ASX-listed casino operator is fortunate, this might be how the Star share price puts some distance between itself and the recently set all-time low of 38 cents a pop.
For now, shareholders will need to sit tight for further details to be revealed.
