Bally's Corporation, which owns and operates 19 casinos in 11 US states, has proposed a last-minute $250 million recapitalisation plan in exchange for a controlling, 50.1 per cent minimum stake in the casino operator.
Star's board notified shareholders of the offer in an ASX announcement on Monday morning and was considering the deal.
"However, there is no certainty that it will be progressed," the Star board wrote.
Star's shares have been in a trading halt for more than a week, after it was unable to sign-off on a financial report as spiralling debts of more than $400 million had the company facing potential insolvency.
Star's doldrums, prompted by sliding revenues, licensing problems and inquiries that uncovered systemic breaches of anti money-laundering laws, have left finances teetering on the edge of the abyss.
The money laundering findings alone cost Star $150 million in 2023.
The group's future, and those of its more than 8000 staff, will depend on its ability to get its books back on track.
Star on Friday secured a $53 million lifeline in exchange for its stake in the Queen's Wharf Brisbane entertainment precinct, which had been hampered by cost blowouts and contract cancellations.
On the same day, Star announced it had entered into documentation for a senior secured $250 million bridge facility and a potential further $750 million refinancing deal with a so-far unnamed party.
Bally's, which has a track record turning around struggling casinos, would underwrite the $250 million capital raise, under which Star would issue capital notes.
"Bally's would partner with Star in deploying our significant operating experience in turning around casino assets and growing highly successful casino businesses globally," Bally's chair Soo Kim wrote.
"We are prepared to move quickly and enter into a binding agreement with Star to implement a capital injection."
The non-binding, unsolicited offer was not a final one, he added.
"To be clear, we remain very open to discussing a larger transaction depending on our discussions with respect to Star's liquidity and capital needs," he said.
"We would also be happy to explore alternative structures that would similarly preserve value for all key constituents, including regulators, creditors, equity holders and employees."
Hong Kong investors in the Wharf Brisbane entertainment precinct, Far East Consortium, said late on Monday the transaction announced on Friday was "a critical step" in securing the long-term viability of the area.
"Under joint ownership with its long-term partner Chow Tai Fook Enterprises, Queen's Wharf Brisbane is well positioned to continue thriving," the consortium said in a statement.
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