Bally’s Evaluates Standard General’s $15-Per-Share Takeover Bid

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In a dramatic turn of events, casino operator Bally’s Corporation, known in the stock market by its ticker symbol NYSE: BALY, has made a critical move in response to an unsolicited acquisition offer. The company’s board of directors has established a special committee with the sole function to meticulously evaluate the $15 per share bid proposed recently by Standard General, a hedge fund that holds a significant 23% of Bally’s outstanding stock.

This decision arrived on the heels of Standard General’s second attempt to secure the gaming enterprise, spearheaded by Soo Kim, a Bally’s board member and the founder of the hedge fund. In an earlier bid in January 2022, Standard General offered an ambitious $38 per share, but the attempt was ultimately declined by the casino operator. While Bally’s, whose roots trace back to Rhode Island, expresses prudence by clarifying that the formation of the special committee does not imply an impending acceptance of the takeover, the company’s future remains poised on the brink of pivotal transformation.

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The company statement articulated the uncertainty ahead, stressing that “there can be no assurance that any definitive offer will be made or accepted, that any agreement will be executed or that this or any transaction will be consummated.”

Despite skepticism following the previous rejection of a much higher offer, Bally’s shares experienced a fervent surge on the back of the current bid, which stood as a 40% premium compared to the March 8 closing price, a climb that continued modestly with the news of the special committee’s formation.

Analysts are divided in their perspectives. Some speculate that the conditions surrounding Bally’s are distinct this time around, potentially opening the door for acceptance where previously there was resistance. Yet, some experts remain dubious of the emergence of rival bids for the regional casino powerhouse.

Bally’s boasts a robust collection of assets. Its operations, including the coveted Tropicana on the Las Vegas Strip and the highly anticipated casino hotel in Chicago, position the company favorably within its sector. Macquarie analyst Chad Beynon has spotlighted these strategic advantages, citing them as prospective drivers of growth, despite the contention surrounding the Chicago development’s outcome.

Bally’s preserve a resolute stance as their gaming empire, now teetering at the prospect of shifting ownership, faces an unforeseen future. It is within this landscape that Standard General made its move, a mere days after Bally’s disclosed ongoing efforts to secure an impressive $800 million to bring the integrated resort in Chicago to fruition.

In the charged discourse around the takeover bid, Soo Kim of Standard General advanced the narrative by emphasizing the immediate boon shareholders would accrue and the looming uncertainties that Bally’s may confront if it remains publicly traded. His intimate understanding of Bally’s due to Standard General’s long-term investment lends credence to his argument that such familiarity could expedite the acquisition process.

Kim’s letter to Bally’s board concluded confidently, “Based upon our experience and familiarity with the Company and extensive discussions we have had with potential financing sources, we do not anticipate any issues in securing financing for the transaction. In any event, the closing of a transaction would not be subject to any financing condition, and we would obtain a financing commitment prior to the execution of definitive merger agreement.”

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