Two Hong Kong families just bought into Australian casino operator Star

Photo: Getty Images

The Star just raised $490 million by selling 10% of the casino operator to two Hong Kong-based trading families.

The company also announced it is increasing the target dividend payout ratio to a minimum of 70% of normalised net profit after tax, up from 50%, starting from the 2018 final dividend.

The two Hong Kong companies are Chow Tai Fook and Far East Consortium. Each end up with a 5% stake in Star.

A short time ago, Star shares were up 1.1% to $5.34.

Chow Tai Fook, with diversified business and investments in hospitality services, infrastructure, energy, aircraft leasing, department stores, jewellery and other consumer and retail businesses, is a private company owned by the Cheng family.

The Cheng Family also controls New World Development Company Limited, a HK Exchange-listed conglomerate, and Chow Tai Fook Jewellery Group Limited, a leader in the jewellery industry, also listed on the HK Exchange.

In Australia, the company owns energy utility Alinta Energy and the Loy Yang B Power Station in Victoria, which supplies nearly 20% of Victoria’s energy needs.

Far East Consortium International, publicly listed in HK and majority-owned by the Chiu family, is a regional conglomerate with property development, hospitality and car parking businesses in Mainland China, Hong Kong, Malaysia, Singapore, Australia, New Zealand, the UK and Europe.

The company has completed $2.5 billion of property projects in Australia including Melbourne landmarks such as Regency Towers, Royal Domain Tower, Northbank Place, Flinders Wharf and Upper West Side.

John O’Neill, the Star Entertainment Group chairman, says the board welcomes Chow Tai Fook and Far East Consortium as shareholders in the Star.

The three companies also entered a strategic alliance to pursue building of up to five towers in the Star Gold Coast Precinct and further development of Sydney’s Star including the proposed Ritz-Carlton Tower.

The strategic alliance also provides exclusivity arrangements for Star on any new casino or gaming developments pursued by its HK partners in Australia or New Zealand.

“Our expanded strategic partnership recognises the strength of our relationships built over the last four years and the shared vision of investing in properties with valuable long-term licences in sought after destinations,” he says.

“The complementary skills and businesses possessed by each partner have contributed over the past four years to creating long-term value for all shareholders, commencing with Queen’s Wharf Brisbane.

“More recently, the Star, Chow Tai Fook and Far East Consortium have jointly participated in the acquisition of the Sheraton Grand Mirage Gold Coast and plans to develop the first joint venture tower as part of The Star Gold Coast masterplan.”

David Chiu, chairman of Far East Consortium, said: “Strengthening the partnership with The Star and Chow Tai Fook further leverages our considerable complementary capabilities and helps to maximise the long-term value of The Star’s properties in Sydney and South-East Queensland.”

Patrick Tsang, chief executive officer of Chow Tai Fook, said: “We welcome this further confirmation of the strength and strategic direction of our relationship with The Star and Far East Consortium. This investment in the relationship reflects our confidence in the creation of long term value in destinations that have significant tourism appeal.”

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