Days before its second-quarter earnings release, Bally’s Corp. accepted a buyout offer from Chairman Soo Kim’s Standard General hedge fund. The bid was unanimously recommended by a Bally’s special committee and endorsed by its board of directors.
Stockholders will receive $18.25 per share, a 71 percent premium to the trading average of BALY stock 30 days before the Standard General takeover bid was received on March 29. Shareholders can also roll over their stock position to ownership in the new corporation.
Two entities, Sinclair Broadcasting and investor Noel Hayden, have already announced their intention to exercise the rollover option. That brings the amount of shares recommitted to the new entity to 47 percent.
Standard General’s initial offer was $15 per share. The definitive agreement, announced Thursday, values the company now at $4.6 billion.
As part of the deal, Bally’s will merge with another Standard General-owned gaming company, The Queen Casino & Entertainment. The latter owns and operates two casinos in Baton Rouge, Louisiana, one in East St. Louis, Illinois, and another in Marquette, Iowa.
The merger with Queen Casino & Entertainment will achieve a combined total of 19 casinos in 11 states. Queen Casino is also the largest shareholder in Intralot, the igaming provider recently ejected from the District Of Columbia.
In addition to 15 extant casinos, Bally’s is in the process of developing one in Chicago, Illinois, and another near the Nittany Mall in State College, Pennsylvania. In addition to a race track in Colorado, it also owns the former Trump Links in New York City, which it hopes to redevelop as a casino resort.
Bally’s executive and special committee chairman, Jaymin Patel, said, “After a detailed consideration by the Special Committee, with the assistance of our outside financial and legal advisors, it was determined that the Cash Consideration from Standard General delivers a meaningful and immediate value to stockholders. We look forward to working with the team at Standard General and QC&E as we move through the process to complete the merger.”
Seconded Kim, “The Transaction provides Bally’s stockholders with a significant cash premium along with certainty of value for their investment or, if they elect to retain their shares, the opportunity to participate in the longer-term growth prospects of our expanded portfolio and significant development pipeline.”
CEO Robeson Reaves emphasized the intention to redouble efforts behind the company’s much-criticized interactive business, as well as its terrestrial casinos. “With QC&E’s development pipeline recently completed or already well underway, we see a path toward additional revenue and EBITDAR growth and value accretion as those projects are completed in 2025.”
The merged Bally’s and Queen Casino will have 17,700 slot machines, 630 table games, and 3,950 hotel rooms. Bally’s also has an option to redevelop the former site of Tropicana Las Vegas.
Queen Casino has seen significant revenue increases in Baton Rouge since opening its eponymous facility there. It is also redeveloping the venerable Belle of Baton Rouge and constructing a land-based casino that will supersede its riverboat in Marquette.
Bally’s stock was up 24.3% to $16.80 on the New York Stock Exchange as of 10:40 am ET.
