The Star Entertainment Group Ltd

SGR: XASX (AUS)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	A$2.73	Xqvd	Hllcx

Star Entertainment: Corporate Action—Entitlements Are Cheap

Angus Hewitt

Sep 26, 2023

We lower our fair value estimate for shares in no-moat The Star Entertainment Group by 33% to AUD 1.20 per share, overwhelmingly due to the dilutive impact of an AUD 750 million capital raise. The equity raise comprises an AUD 589 million 1 for 1.65 pro rata nonrenounceable rights offer and an AUD 161 million institutional placement. A further AUD 450 million in new debt facilities will wipe out all of Star's existing debt and provide headroom for any near-term payments—including our estimates for AUD 200 million in state regulator fines and an AUD 330 million penalty from AUSTRAC.

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