Home In-Depth Bally’s creates committee to assess Standard General Takeover Proposal

Bally’s creates committee to assess Standard General Takeover Proposal

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Bally’s formed a committee that will evaluate the offer from the New York hedge fund Standard General to buy the rest of the company at $15 per share (PS11,73/EUR13.73).

Standard General’s offer was published as a non-binding document in a US Securities and Exchange Commission 13D filing. This has led to heightened Bally’s stock price, which now stands at $14.08, a 33.46% increase from the Friday closing price of the NYSE.

Standard General will offer the new committee to evaluate its proposal for the acquisition of the entire outstanding common shares beyond the 25 percent that the hedge fund currently owns. Bally’s Committee, consisting of independent and disinterested Directors will analyse potential alternatives to Standard General’s proposal.

Bally’s said in the announcement of the committee that there was “no guarantee” as to whether or not the offer would be accepted, nor any agreements will be signed.

Second bite of the Bally’sapple Standard General

Standard General has made two full bids for Bally’s. In January 2022 it made a similar attempt, whereby they offered to purchase the company at $38 per share. Bally’s is valued at over 50% lower than two years ago in the new hedge fund offer.

In the offer letter, it was stated: “The proposed deal would require the approval of both the Board of Directors of the Company and negotiation of definitive documents that are mutually agreeable.”

This offer of $15 per share was 41% higher than Bally’s Friday closing price at the New York Stock Exchange, which was $10.55. The company has a total market cap of more than $600m. Bally shares jumped 25.24 % to $13.30 after the announcement of the deal. Bally shares are now trading at $14.08 as of Tuesday morning, up 33.46 percent from Friday’s close.

Mix 2023 for Bally’s

Bally’s had a mixed year in 2023, as the price dropped from Standard General’s initial offer of 2022 to reflect the continued loss. Total operating costs fell by 8.7% in 2023 to $2.34bn.

This is a significant increase over the $454.5m loss in 2022. The adjusted EBITDA in 2023, however, fell by 3.9% and reached $527.3m.

Bally’s saw several major changes in 2023. The company cut 15% of the interactive staff in North America to save money. Diamond Sports Group (the operator of Bally’s TV Sports Networks) was reported to be near bankruptcy shortly after.

Bally’s prospects improved as the year 2023 progressed, especially after Robeson Reeves was appointed new CEO in March.

Bally’s outsourced its sports betting technology stack to Kambi Gaming and White Hat Gaming. Bally’s entered the UK igaming market in September by launching a Bally’s branded online casino at Gamesys’ Megaways Casino.

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