The Star Entertainment Group Ltd
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
A$8.93 | Lxvk | Pfjw |
Star Entertainment: Corporate Action—Entitlements Are Cheap
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.