Bally’s shareholders approve $4.6 billion takeover bid

Neha Soni November 21, 2024

SiGMA news

Bally’s shareholders approve $4.6 billion takeover bid

Bally’s Corporation shareholders have approved the merger with The Queen Casino & Entertainment (QC&E), a portfolio company majority-owned by Standard General, Bally’s largest shareholder.?

The $4.6 billion offer, tabled in March and accepted by the operator in July, will see the hedge fund acquiring the company’s outstanding shares for $18.25 per share. The offer represents a 71 percent premium over Bally’s 30-day average share price from the last trading day prior to a previous offer from Standard General of $15.

Bally’s stockholders, including shareholders, voted in favour of the merger agreement, securing the required majority vote. Upon completion of the merger, which is expected in the first half of 2025, Bally will remain a publicly traded company.

The company said the shareholders who have opted to retain their shares will see them trade temporarily under the ticker symbol ‘BALY.T’ on the New York Stock Exchange before reverting back to the original ‘BALY’ once the merger is finalised.?

This process is to make sure that these shares remain active and valid throughout the merger process and beyond.

In July, Standard General managing partner Soo Kim said the acquisition offers Bally’s stakeholders a significant cash premium. It also provides the opportunity to participate in its expanded portfolio’s long-term growth prospects. Kim said the incorporation of the complementary QC&E assets builds attractively on Bally’s profile. QC&E operates four casinos across Illinois, Iowa, and Louisiana.?

The combined company will manage 19 gaming facilities across 11 states, offering a diverse range of digital gaming and sports betting products.

For the third quarter, Bally reported a minimal 0.4 percent revenue decline year-on-year to $630 million. This comes as growth in the UK online and North America Interactive segments offsetting declines elsewhere, growing 11.8 percent and 54.5 percent, respectively.

Adjusted earnings before interest, taxes, depriciation and amortisation fell slightly to $137.7 million for the quarter, while net loss widened to $247.9 million. CEO Robeson Reeves said the results were “relatively healthy,” citing progress in key US markets.

Asian Interactive business buyout

In related news, Bally agreed to a management buyout of its Asian Interactive business. The company announced its decision to divest its Asian interactive business to sharpen its focus on operations in North America and Europe. The transaction was?detailed in a filing?with the U.S. Securities and Exchange Commission (SEC), which was submitted on 31 October 2024, with a public disclosure following the next day.

Asia interactive business has established a significant presence in Japan, operating four brands: CasinoSecret, Vera&John, InterCasino, and Yuugado. While specific details regarding the buyer remain sparse, the agreement indicates that the purchaser is a new entity formed by members of the carved-out business’s management team.

Under the terms of the sale, certain intellectual property rights will be placed in a trust and licenced to the new owner for a period of five years, with the option for extension. Bally’s will also provide transitional services to ensure a smooth handover of operations. However, once the transaction concludes, the corporation will no longer be involved in the management or governance of the Carved-Out Business.