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Bally’s forms committee to evaluate Standard General takeover proposal

| By Kyle Goldsmith
Bally’s has formed a special committee to evaluate New York-based hedge fund Standard General’s offer to acquire the remainder of the company for $15 (£11.73/€13.73) a share.
Bally's Rhode Island

On Monday, Standard General’s non-binding offer, published in a US Securities and Exchange Commission (SEC) 13D filing, has now seen Bally’s share price increase to $14.08, up 33.46% from Friday’s closing price on the NYSE.

The new special committee will evaluate Standard General’s offer to acquire the entirety of of all outstanding shares of common stock beyond the 25% the hedge fund already owns. The Bally’s committee, made up of “independent and disinterested directors”, will also analyse any potential strategic alternatives to the proposal.

In the statement announcing the committee, Bally’s stated there would be “no assurance” on whether the offer will be accepted or any agreement will be executed.

A second Standard General bite at the Bally’s apple

The new offer is the second that Standard General have made a full takeover bid for Bally’s. It previously made an attempt in January 2022, offering to buy the company for $38 a share. The new offer suggests the hedge fund values Bally’s over 50% less than it did two years ago.

The offer letter outlined: “The proposed transaction would be subject to the approval of the board of directors of the company and the negotiation and execution of mutually acceptable definitive transaction documents.”

The $15-per-share offer was at a 41% premium to Bally’s closing price on Friday on the New York Stock Exchange at $10.55. In total, the company holds a market capitalisation of over $600m. After the news of the offer came out, Bally’s share price jumped up 25.24% to $13.30 on Monday. At the time of writing on Tuesday, Bally’s share price is now at $14.08, up 33.46% on Friday’s closing price.

Mixed 2023 for Bally’s

2023 was an up-and-down year for Bally’s, with the drop in price from Standard General’s first offer in 2022 reflecting the company’s continued net loss. Accumulated total operating costs fell 8.7% to $2.34bn during 2023.

After including $289.7m in other expenses, this left a pre-tax loss of $167.6m, a rise on 2022’s figure of $454.5m. However, adjusted EBITDA for 2023 fell 3.9% to $527.3m.

2023 saw a number of major developments for Bally’s. In January, the company announced it was cutting 15% of its North American interactive workforce in order to reduce costs. Following that, there was news that Diamond Sports Group, operator of the Bally’s branded TV sports networks, was nearing bankruptcy.

However, as 2023 went on, Bally’s outlook brightened after the March appointment of new chief executive Robeson Reeves.

Highlights included Bally’s outsourcing its sports betting tech stack to Kambi and White Hat Gaming. In September, Bally’s also moved into the UK igaming sector, rolling out Bally’s-branded online casino on Gamesys’ existing Megaways Casino site.

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