Rear Window
Star’s capital-raise costs Robbie Cooke
Myriam RobinColumnistKeeping battered casino titan Star Entertainment afloat is costing its chief executive, as well as its shareholders.
At next month’s AGM, suffering owners will be asked to approve roughly 1 million retention-linked performance rights for newish CEO Robbie Cooke.
Star Entertainment boss Robbie Cooke: earning less by the month. Louie Douvis
These were meant to be worth 90 per cent of his fixed pay (which is $1.4 million) in shares vesting over three years, as calculated at the share price average in the 10 trading days after the August financial results, which was 95.6¢.
But a month after that, Cooke announced another capital raise at 60¢ a pop, pushing the share price down to that level. It remains there, some 36.2 per cent below the figure at which his retention rights were calculated. Even before the rights are formally approved, he’s out some $500,000 on their face value. And the shares he was granted in December last year as a sign-on bonus are now even deeper in the red.
Investors are unlikely to care, given his nearly year-long tenure has so far failed to improve the dire situation he inherited.
And what of Cooke, whose gig is tougher than ever but less lucrative with every passing month? Even the dwindling value of his free shares must make him reconsider his decision to take on the joint!
Making things worse, his turnaround plan is getting a decidedly lukewarm response from investors. Billionaire pubs baron Bruce Mathieson sat this capital raise out, his stake diluting from 9.97 per cent to 6.35 per cent as a result. Star’s controversial Queens Wharf business partner Chow Tai Fook has also declined to cough up more dough, as has fellow Asian conglomerate Far East Enterprises.
One party not complaining about all this capital markets activity is broker and lead adviser Barrenjoey, now clipping the ticket twice and earning far more for selling equity than it would raising debt. Barrenjoey has banked nearly $25 million, the majority of which came from the second, contentious $750 million raise, which earned it $14.6 million in management and underwriting fees. In March, Barrenjoey and Macquarie pocketed $9 million apiece of the $800 million raised. Nice work, if you can get it.
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