Why are Star shares rocketing 12% today?

Star Entertainment Group Ltd (ASX: SGR) shares are taking off on Wednesday.

In morning trade, the casino and resorts operator's shares are up 12% to 11.75 cents.

Why are Star shares rocketing?

Investors have been bidding the company's shares higher following the release of its second announcement in as many days.

On Tuesday, the company revealed that its group CEO and managing director, Steve McCann, was leaving with immediate effect.

Commenting on the news, Star Entertainment's chair, Bruce Mathieson Jnr, said:

On behalf of the Board I want to thank Steve for his strong leadership and hard work during one of the most complex and challenging periods for The Star. Steve joined at a time of crisis for The Star and has helped to deliver a critical financial reset for the business and successfully progressed our Remediation Plan, which have laid the foundations for The Star's long-term future success. We wish him well in his next endeavours.

Speaking about his exit, Mr McCann said:

The strategic investment by Bally's Corporation and Investment Holdings Pty Ltd provides an opportunity for The Star to move in a new direction and pursue a pathway to recovery and future growth. Now is the right time for new leadership to be put in place with the experience and passion to build on that momentum and take The Star forward.

In response, it was revealed that Bruce Mathieson Jnr will take on additional duties as executive chair while a search for a permanent CEO is conducted.

However, that change lasted less than a day.

Chair steps down

Today's announcement reveals that Bruce Mathieson Jnr stepped down as chairman and was appointed as its CEO at a board meeting yesterday. This is subject to agreement of final documentation.

Mathieson Jnr will remain on the board as an executive director.

Replacing him as the company's chair will be Soo Kim, after he was appointed to the role at the board meeting.

The company also revealed that Peter Hodgson and Toni Thornton have resigned as non-executive directors, effective 16 December. This means that the board will now comprise just Soo Kim, Bruce Mathieson Jnr, and George Papanier.

Star's new chair, Soo Kim, commented:

We are fortunate to have Bruce lead our company as CEO. George and I understand what an honour and responsibility it is to join and contribute to the Board. We are confident our best days are ahead.

The post Why are Star shares rocketing 12% today? appeared first on The Motley Fool Australia.

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