JPMorgan acquires stake in struggling Australian casino operator Star Entertainment

U.S. banking giant JPMorgan Chase & Co has acquired a 5.47% voting stake in Star Entertainment, becoming a substantial shareholder in the cash-strapped Australian casino operator, according to an exchange filing on Thursday.

Star Entertainment has seen its stock plunge by 50% this year alone, following declines of 52% in 2022 and 66% in 2023. The company has faced significant financial challenges, stemming from multiple inquiries into anti-money laundering violations that have severely impacted its liquidity.

In its delayed annual results released last month, Star outlined plans to offload assets as part of ongoing restructuring efforts. The company is also addressing regulatory outflows related to past violations. In an effort to stabilize its financial position, Star's lenders have agreed to a new funding facility of up to A$200 million ($137 million), with an immediate A$100 million injection to provide liquidity.

Earlier this year, Australian asset manager Perpetual increased its stake in Star, further signaling investor interest in the troubled firm. However, despite earlier claims by Star that Hard Rock Hotels & Casinos was considering a bid, the Florida-based company denied any involvement in a potential takeover.

Star’s future remains uncertain, especially after an inquiry found significant issues within the company’s leadership and culture, concluding that it was unfit to operate its Sydney casino. Last month, Star responded to a show-cause notice from New South Wales regulators, addressing concerns over its suitability to retain its casino license.