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Bally’s Corp. shares rose more than 25% after Standard General offered to buy the balance of shares that the investment firm doesn’t already own at an estimated total cost of about $684 million.
Standard General is a New York-based hedge fund and Bally’s largest shareholder. Currently, Standard General holds a nearly 23% stake in Bally’s. The firm offered to purchase the remainder of shares for $15 per share. That $15-per-share offer is a 41% premium to Bally’s closing price on March 8, 2024.
Following the proposal’s announcement, Bally’s share price jumped about 26% to $13.30.
The offer came less than a week after the Rhode Island online casino market went live with Bally’s as the sole operator.
Standard General expects Bally’s special committee to consider the offer
In a regulatory filing Monday (March 11), Standard General said it had sent the proposal to Bally’s board of directors. Signed by Soo Kim, the offer letter stated:
“Our proposed transaction would allow the Company’s stockholders to immediately realize a premium price, in cash, for their investment and provides stockholders certainty of value for their shares, especially when viewed against the operational risks inherent in the Company’s business and the market risks inherent in remaining a publicly-listed company. We would also be prepared to permit stockholders to elect to “roll-over” all or a portion of their Company shares into equity of the post-closing company.
The proposed transaction would be subject to the approval of the board of directors of the company and the negotiation and execution of mutually acceptable definitive transaction documents.
It is our expectation that the board of directors will appoint a special committee of independent directors to consider our proposal and make a recommendation to the Board of directors. We will not move forward with the transaction unless it is approved by such a special committee.”
Soohyung (Soo) Kim is also the current Bally’s chairman. He is also the founding partner of investment firm Standard General LP and is the firm’s managing partner and chief investment officer.
Standard General also has holdings in Intralot, the supplier of integrated gaming and transaction processing systems, game content, sports betting management, and gaming services.
Bally’s confirms the formation of a special committee
The board of directors of Bally’s Corp. (NYSE: BALY) announced that it has formed a special committee of independent and disinterested directors that is authorized to evaluate the preliminary, non-binding proposal. Bally’s official announcement came out on March 12.
The company emphasized, however, that there is no assurance that any definitive offer will be made or accepted.
Standard General offered to buy Bally’s shares in 2022
It’s the second time Standard General has made a full takeover bid for Bally’s. The current offer is less than the prior offer from two years ago.
In January 2022, Standard General offered to buy the US gambling company for $38 per share. At the time, the casino operator’s business was valued at about $2 billion.
Bally’s special committee of its board directors terminated all consideration of the proposal, saying the casino operator has plentiful opportunities for growth in its future.
Back then, Kim noted that the $38 per-share offering represented a 30% premium compared to Bally’s closing share price of $29.27 on 24 January 2022. He also said that Bally’s decision to terminate the deal would not influence how Standard General supports the operator.
With 10,500 employees, Bally’s owns and manages 16 casinos across 10 states in addition to online gambling platforms in nine states.
