Bally’s dismisses shareholder-led takeover bid
Igaming and casino operator rejects Standard General overtures to take full control of business amid $500m share auction
Bally’s has “terminated” discussions over a potential acquisition of all its outstanding shares by Standard General, an investment fund run by Bally’s chairman Soo Kim.
A special committee appointed by the igaming and casino operator had been drafted in to consider the proposal first tabled in January.
At the time, Standard General proposed the acquisition of all outstanding shares in Bally’s not currently owned by Standard General at a price of $38 per share, representing a premium of 30% on the company’s closing price on January 24.
Standard General was founded by Soo Kim in 2007 and currently owns a 21% stake in Bally’s, however, this move would have increased the company’s stake dramatically, effectively taking the business private.
Kim suggested this deal would enable shareholders to “realize an attractive value”, however these overtures were ultimately rejected by the committee.
As an alternative, Bally’s board of directors has said it will initiate a cash tender offer for its shares.
This tender is expected to involve between $300m and $500m worth of shares, with the auction structured in a Dutch auction format whereby the sale price is reduced until a buyer is found.
The commencement of the offering is subject to obtaining necessary financing and final approval by the board. Bally’s CEO Lee Fenton welcomed the decision, highlighting the potential roadmap to the operator going forward.
“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.
Bally’s chairman and Standard General managing partner Kim expressed his dismay at the rejection by the special committee but affirmed his confidence in the business.
“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,” Kim added.