Among the major news on Australian stocks, Star Entertainment Group Limited (AU:SGR) surged 20% to its one-month high following the company’s announcement of receiving potential takeover interests from multiple parties. However, the company clarified that it has not progressed to any meaningful discussions as of yet.
The Star Entertainment Group is a gambling and hospitality company that owns and operates The Star Sydney, The Star Gold Coast, and Treasury Brisbane.
During the announcement, the company also addressed media reports regarding a takeover proposal from Hard Rock Hotels and Casinos. It clarified that while Hard Rock had not submitted a direct proposal, a local partner of Hard Rock was part of a consortium that had expressed interest.
Following its announcement regarding potential bids, the company’s shares were put on a trading halt. After trading resumed, they gained another 20%, resulting in a nearly 29% increase over the past month.
Takeover Bid: A Turning Point for Star Entertainment?
Overall, the market has responded positively to the announcement, considering the company’s recent turmoil stemming from a regulatory inquiry.
In recent years, Australian casino operators have faced increased regulatory scrutiny triggered by money laundering concerns. Consequently, Star Entertainment is currently undergoing an inquiry to retain its gaming license for the Sydney casino, casting uncertainty over its future.
Previously, authorities deemed the company unsuitable to hold its casino license, resulting in substantial fines. In December 2023, the company was granted a six-month deadline to rectify its license status or potentially face closure.
In its statement, the company said it is still focusing on fixing issues in New South Wales and Queensland while taking part in the Bell Two Inquiry.
What Is the Price Prediction for SGR Stock?
As per the consensus among analysts on TipRanks, SGR stock has been rated as a Hold. This is based on two Buy, two Hold, and one Sell recommendations. The Star Entertainment stock’s average price target is AU$0.60, which is 13% above the current price.
