STAR ON STEROIDS
‘$12b Crown casinos merger to supercharge conventions, tourism and be BHP of gaming’
A MEGA gaming and hospitality merger of Crown Resorts and Star Entertainment Group will supercharge the Gold Coast’s convention centre and tourism, leaders say. Tourism bigwig Paul Donovan said a proposed $12 billion Crown-Star behemoth would give impetus to convention centre expansion at Broadbeach. Star CEO Matt Bekier said: “What this deal does for the Gold Coast ... it gets us access to a larger domestic customer base. We can sell the Gold Coast more broadly not just into Sydney but into (Crown in) Melbourne and Perth.”
A CROWN-Star merger would create the “BHP of hospitality and gaming” enabling the Gold Coast to tap into an expanded marketplace including capital cities Melbourne and Perth.
Star Entertainment Group CEO Matt Bekier said Star’s indicative proposal on Monday to merge with Crown Resorts would create a company “bigger than Qantas” with 30,000 staff if approved.
Mr Bekier said the offer from Star, building two new towers on its Broadbeach Island which is already home to the Star Grand and Darling hotels, would greatly benefit the Glitter Strip.
“It’s all good news because in the short-term the investments we are making on the Gold Coast won’t change.
“The (Broadbeach Island) masterplan is approved for another three towers. What this deal does for the Gold Coast is in the short term it gets us access to a larger domestic customer base so we can sell the Gold Coast more broadly, not just into Sydney but also into (Crown territory) Melbourne and Perth.”
Mr Bekier brushed off a suggestion the Gold Coast – if a new entity was approved by Crown shareholders – could become a minor player within a bigger company.
“As a tourist destination southeast Queensland is the hotspot, if you look at the medium term growth, population growth, economic development, migration and hopefully (2032) Olympics. That is all fantastically attractive to an operator like us. We will seek to take full advantage of our position in that market.”
Mr Bekier said an $8bn Crown takeover offer from private equity group Blackstone – which has significant integrated casino and hospitality venues in the US and Europe – “got the ball rolling” on StarCrown merger talks.
“All shareholders will be better off if we create this big Australian-owned company which is kind of going to be like the BHP of hospitality and gaming that will allow us to compete globally,” he said.
“Hopefully Crown shareholders will see the benefits.”
Mr Bekier acknowledged regulatory hurdles, such as approval from federal competition regulator – the Australian Competition and Consumer Commission – to overcome.
“But we would not have gone forward with this if we thought we were going to fail. The regulatory hurdles can be overcome. We have had conversations with governments and regulators in (NSW, Qld, WA and Victoria) and it’s fair to say we have had good hearings and a relatively warm reception. But ultimately the decision is up to the Crown shareholders.”
Destination Gold Coast chairman Paul Donovan said a merger would be pay significant dividends for the city.
“There will be huge opportunities out of this such as the impetus to get the expansion of the Gold Coast Convention and Exhibition Centre which is something we will really need once we get back to hosting business events and large conventions again.
“With Crown and Star’s reach in Melbourne and Sydney, as well as overseas, this will potentially mean more business from those locations and eventually from international destinations.”
Gold Coast Mayor Tom Tate said it would open the door to a long-awaited revamp of the Sheraton Grand Mirage Resort on The Spit.
It is the location where Star has eyed building the Gold Coast’s first beach club.
“It is due for an upgrade. While Christopher Skase did a great job back in the 1980s, like any wonderful resort it needs a facelift,” he said.
“The location is perfect. I would like to see them do a (beach club) trial so if you are walking along Federation Walk and want to enjoy five-star service on the beach, why not?
“There could be serious flow-on effects and as a city we should encourage that.”
Star chairman John O’Neill said a merged company would be a world-class entertainment and tourism leader and “result in significant scale and diversification and unlock an estimated $2bn in net value from synergies.
“With a portfolio of worldclass properties across four states in Australia’s most attractive and populated catchment areas and tourism hubs, the combined group would be a compelling investment proposition and one of the largest and most attractive integrated resort operators in the Asia Pacific region.”
The plan would create the nation’s largest casino group and bring together a property portfolio including Queens Wharf project in Brisbane.
the We can market not Gold Coast now but just in to S ydney also into Melbourne and Perth.