Distressed debt behemoths team up for Star Entertainment refi play

afr.com:

Oaktree Capital, the special situations specialist which has repeatedly tried to get into Australia’s wagering industry, is working with Bain Capital on one of the hottest refinancing deals of the year – Star Entertainment.

Sources told Street Talk that the two massive asset managers were likely to lob a joint proposal and were among the last two groups in contention. The process is being run by Ashurst partner Shawn Wytenburg and Barrenjoey’s Barry Sharkey, as part of a strategic review of Star’s Sydney operations.

At Bain, the mooted tilt is led by not by the investment giant’s private equity team but by Josh Hartz. A former Anchorage Capital Group operator, Hartz runs distressed and special situations for the Bain’s credit division out of the Sydney office and was heavily involved in the acquisition of Virgin Australia following the airline’s collapse during the COVID-19 pandemic.

Star Entertainment has been under financial strain amid a proposed NSW tax increase and with more competition in Sydney from Crown Resorts. Bloomberg

Oaktree, meanwhile, has had several attempts at the local casino sector. In 2021, it lobbed a $3 billion bid to fund the buyback of shares held by Crown Resorts’ major shareholder, James Packer, in a deal that would have seen the investment manager end up with a 9.9 per cent stake in the group. That offer was given little attention, and Crown eventually sold to Blackstone.

Earlier this year, as Street Talk first reported, Oaktree spent weeks discussing potential funding plans with Star and exploring structures that would have resulted in it injecting hundreds of millions of dollars in equity into the embattled casino giant. In the end, Star decided to go a different direction, raising money