Analyst: Bally’s $2.8 billion offer for Gamesys could be ‘a transformative acquisition’

March 25, 2021 11:41 AM
  • Howard Stutz, CDC Gaming Reports
March 25, 2021 11:41 AM
  • Howard Stutz, CDC Gaming Reports

A $2.8 billion acquisition offer by Bally’s Corp. for United Kingdom-based igaming provider Gamesys has two scenarios.

The deal could proceed as smoothly as Caesars Entertainment’s $3.7 billion acquisition of British sports betting giant William Hill, which is expected to close in April, some seven months after the agreement was announced.

Or it could fall apart as fast as MGM Resorts International’s attempt in January to purchase United Kingdom-based Entain PLC for a proposed $11 billion.

The U.S. investment community didn’t have much reaction Wednesday to overnight news from London on the latest move by a gaming operator to acquire a British-based gambling business.

Bally’s, in a filing with the Securities and Exchange early Wednesday morning, said: “it had reached an agreement in principle on key terms of a possible combination of Bally’s and Gamesys Group plc.” The offer was through a mix of stock and cash. Bally’s shares, traded on the New York Stock Exchange, closed at $68.0, up $1.72 or 2.59%.

Rhode Island-based Bally’s has until April 21 to make an official offer.

In a statement, Bally’s Chairman Soo Kim said that Gamesys “proven technology platform alongside its highly respected and experienced management team, combined with the U.S. market access that Bally’s provides, should allow the combined group to capitalize on the significant growth opportunities in the U.S. sports betting and online markets.”

Bally’s has its sights set on launching an omnichannel network this year that includes sports betting, daily fantasy sports, igaming, and social gaming. On Tuesday, completed its acquisition of daily fantasy sports provider Monkey Knife Fight, which the company plans to add to its growing digital gaming platform.

Last fall, Bally’s acquired sports wagering platform Bet.Works for $125 million and struck a partnership with Sinclair Broadcast Group in which the Bally’s name will replace Fox on Sinclair’s 21 regional sports networks.

Truist Securities gaming analyst Barry Jonas had a positive view on the proposed Gamesys deal, telling investors Wednesday the “transformative acquisition” would bolster Bally’s plans “by adding market-leading icasino technology and a well-regarded management team.”

The merged company would be managed by Gamesys CEO Lee Fenton. Bally’s CEO George Papanier would remain a board member and continue to run the company’s casino business, which has been in an expansion mode for almost two years.

Bally’s currently operates 11 casinos in seven states. Through pending deals, the company expects to have 15 casinos in 11 states by next year. Bally’s is expected to close on its purchase of MontBleu Resort in Lake Tahoe, Nevada next month.

Kim spent $20 million last fall to acquire the trademark and rights to the Bally’s name from Caesars Entertainment. At the time, the company was known as Twin River Worldwide Holdings.

Jonas said Bally’s acquisition of Bet.Works helps in the igaming space, but he said the company’s primary focus and expertise was in sports betting.

“We would also expect more deals to be announced (for market access, mergers and acquisitions) to help even further solidify Bally’s as a credible contender in the emerging U.S. sports betting and igaming market,” Jonas said.

Howard Stutz is the executive editor of CDC Gaming Reports. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.