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THE GAMALYZE CHALLENGE

Bally's Shareholder Wants to Take Full Control of the Company

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In a potentially significant development for the casino industry, hedge fund Standard General has made an offer to acquire the remaining stake in Bally's Corporation that it does not already own. The proposal values the casino operator at approximately $684 million.

A Second Try for Standard General

Standard General, which currently holds a near 23% stake in Bally's, aims to consolidate its position within the company. The heart of the offer lies in the price per share of $15. This represents a 41% premium over Bally's last closing price.

Related: Rhode Island Expands US iGaming Market with Bally's Launch

Notably, the offering price is a departure from Standard General's prior bid in 2022, which valued Bally's at a substantial $2 billion with an offer of $38 per share. The revised proposal reflects a more conservative approach, yet it remains a significant investment in the casino operator.

Bally's' board of directors has acknowledged the offer and is actively considering its implications. The decision-making process involves evaluating the potential benefits for shareholders, the company's strategic direction and the overall impact on Bally's operations. While the current offer is notably lower than the previous bid, it still represents a substantial opportunity for Standard General to increase its ownership stake.

All in the Timing

Bally's, known for its diverse portfolio of casinos and gaming properties, has been a prominent player in the industry. The company's footprint extends across the US, encompassing markets and operations in various states. As Standard General seeks to expand its influence, the acquisition of additional Bally's shares aligns with its strategic vision.

Behind the buyout offer is Soo Kim, the chairman of Bally's and founding partner of Standard General. He acknowledged that the amount put on the table is much lower than the previous offer, but says it's adequate based on the current status of the market.

He pointed to concerns about the company's financial health and broader economic challenges like inflation and rising interest rates. As of the end of the fourth quarter, Bally's held $163 million in cash but also carried a substantial debt of $3.6 billion.

Recently, the company's CFO, Marcus Glover, informed the Nevada Gaming Control Board that Bally's needed to secure additional funding. It is looking to raise approximately $800 million to cover the remaining costs for constructing a permanent casino at the Chicago Tribune's 30-acre River West publishing site, which amounts to $1.1 billion.

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