Bally’s rejects Standard General’s takeover bid as part of Q1 2022 earnings announcement
$2.07bn proposal terminated as operator buoyed by casino revenue despite interactive dip
Bally’s Corporation has terminated a takeover proposal by Standard General, with a special committee of the gaming operator’s board of directors formally rejecting the investment firm’s $2.07bn (£1.67bn) bid to acquire all of the outstanding shares that Bally’s didn’t already own.
As part of the development, which was highlighted on the same day as Bally’s Q1 2022 earnings announcement, its board of directors also indicated it intends to initiate a cash tender offer for its shares. The offer is expected to involve $300m to $500m.
“While we are of course disappointed with the outcome of the discussions of our proposal, as we said from the outset, we intend to remain a supportive, long-term investor in the company,” said Standard General managing partner and current Bally’s chairman Soo Kim.
Bally’s is coming off a strong first quarter of 2022 in which its revenue amounted to $548.3m (£444m). That represented nearly a three-fold year-over-year (YoY) increase from the $192.3m it totalled in the same period of 2021.
Net income was in the black at $1.89m, in contrast to a loss of $10.7m in Q1 2021.
Adjusted EBITDA came in at just under $115m, a significant YoY uptick from $52.5m in the first quarter of 2021.
Bally’s CEO Lee Fenton attributed the revenue growth to a strong performance from its casinos and resorts segment, which was buoyed by the lifting of Covid-19 restrictions and the resulting flow of customers back into its properties.
While revenue from its International Interactive segment was down 1% YoY, North America Interactive continues to pick up steam, with the Bally Bet mobile app live in Arizona since 4 May on the operator’s 2.0 tech stack.
New York, meanwhile, represents the biggest milestone yet for Bally’s, which is on track to launch operations in the biggest US market sometime in Q2.
“The company has very substantial opportunities before it, including the integration of the Gamesys acquisition, the build-out of Bally’s North American interactive business and the continued strategic expansion of our land-based footprint in the US,” Fenton said.
“With these opportunities in front of us, we have great confidence in the future as we move forward,” he added.