Bally’s shares rise 23% amid private share acquisition proposal
Major shareholder Standard General tables motion to acquire outstanding shares at 30% markup
Shares in BallyBet parent company Bally’s rose by 22% in early trading on Tuesday following the publication of proposals to take the company into private ownership.
In early trading on the New York Stock Exchange, shares rose from a January 24 close of $29.23 to a price of $35.85 per share, an increase of 23% in just 24 hours.
The share rise comes as Bally’s chairman, Soohyung Kim, acting via his Standard General business, submitted a proposal to acquire all outstanding shares in Bally’s not currently owned by Standard General at a price of $38 per share.
The offer price represents a premium of 30% on the company’s closing price on January 24.
Standard General was founded by Soohyung Kim in 2007 and currently owns a 21% stake in Bally’s, however, this move would increase the company’s stake dramatically, effectively taking the company private.
“Our proposed transaction would allow the company’s stockholders to immediately realize an attractive value, in cash, for their investment and provide 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 public company,” Kim wrote in a letter accompanying the proposal.
As part of this process, Bally’s board of directors will be required to set up an independent committee which will give its definitive assent or rejection of the deal.
It also will be subject to a non-waivable condition requiring approval from Bally’s shareholders.
“Given our existing position and history with the company, we will not need to do any due diligence to enable us to be in a position to negotiate and execute mutually acceptable definitive documentation,” Kim continued.
“As a result of our long-term involvement with the company and its predecessor, we have a detailed understanding of Bally’s, its business and assets, which will enable us to move quickly to finalize a transaction,” he added.
Bally’s merged with UK igaming operator Gamesys Group in October 2021.
It is one of three operators yet to launch in the New York sports betting market, having not received permission to do so from the New York State Gaming Commission.
Bally’s beat off stiff competition to secure a New York licence in November 2021, however, the firm did not receive the required ascent from regulators to launch on January 8, the Empire State’s market debut.
Other license holders who have yet to launch in New York include Wynn Interactive and Resorts World Digital.