Bally’s Corporation has formed a special committee that will assess a preliminary, non-binding acquisition proposal by Standard General.
The New York-based investment firm, whose founding partner is current Bally’s chair Soohyung Kim, offer includes the purchase of the remaining outstanding Bally’s shares that it doesn’t already own for a price of $38 each, totaling $2.07bn and representing a premium of 30% to the closing price as of January 24, 2022.
Formed of “independent and disinterested directors,” the casino operator says that its special committee will evaluate the proposal and any possible strategic alternatives.
Bally’s said in a statement: “There can be no assurance that any definitive offer will be made or accepted, that any agreement will be executed or that any transaction will be consummated.”
Kim noted in a public filing detailing the motion: “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.
“We intend to fund the transaction through sale and lease back and other long-term financing arrangements.”
As the largest stockholder of Bally’s with an equity interest representing more than 20% of the outstanding shares, Standard General would sell current real estate for a cash injection before agreeing to lease back deals with the buyers.
“In considering this proposal, you should know that if the special committee does not recommend or the public stockholders of the company do not approve the proposed transaction, such determination would not adversely affect our future relationship with the company, and we would intend to remain as a long-term stockholder,” Kim added.
“Please be aware that this proposal is an expression of interest only, and we reserve the right to withdraw or modify our proposal in any manner.
“No legal obligation with respect to a transaction shall arise unless and until execution of mutually acceptable definitive documentation.
“Once definitive documentation is executed, completion of the transaction would also be subject to receipt of required regulatory approvals, including approvals under applicable gaming regulations and antitrust laws and other customary conditions. We do not anticipate any issues in obtaining required regulatory approvals.”
Bally’s owns and manages 14 casinos across 10 states, which could increase to 16 in 11 jurisdictions soon, with its casino operations including more than 15,800 slot machines, 500 table games, and 5,300 hotel rooms
The operator itself has made a few acquisitions over the past year, acquiring Degree 53, Gamesys Group, and Bet.Works.