Standard General lodges $2.07 billion takeover offer for Bally’s Corporation

The value of individual shares in American land-based casino operator Bally’s Corporation reportedly rose by around 25% yesterday following news that its largest investor has floated an around $2.07 billion takeover offer.

According to a Tuesday report from the Bloomberg news service, American hedge fund Standard General is already the Rhode Island-based casino company’s largest shareholder courtesy of a 21% stake but is now looking to fully acquire the firm behind such properties as the 1,214-room Bally’s Atlantic City via a $38-per-share proposition.

Extensive enterprise:

Previously known as Twin River Worldwide Holdings Incorporated until undergoing a late-2020 name-change, Bally’s Corporation is responsible for 15 land-based American casinos while moreover being licensed to offer mobile-friendly online sportsbetting to punters in eight states including New Jersey, Illinois, Nevada and Pennsylvania. To further boost its iGaming prospects and the company has also recently inked deals to acquire free-play games developer SportCaller, digital technology and services enterprise Bet.Works Corporation and daily fantasy sports firm Monkey Knife Fight.

British business:

Bloomberg reported that Bally’s Corporation furthermore completed its own $2.2 billion purchase of British iGaming firm Gamesys Group in October while any takeover by Standard General would likely give the investor control over this entity, which is responsible for a number of United Kingdom-licensed online casinos such as InterCasino.co.uk, RainbowRichesCasino.com and VeraJohn.com.

Investor intention:

Soohyung Kim is one of the founders of Standard General while additionally serving as the Chairman for Bally’s Corporation and he reportedly disclosed that any takeover deal will need to be approved by a majority of the target enterprise’s shareholders after being scrutinized by a special committee of independent directors. The executive purportedly used an official filing with the Securities and Exchange Commission to detail that the New York City-headquartered buyer intends to finance its purchase via the sale and subsequent lease-back of the operator’s land-based casino properties.

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Reportedly read a statement fr lodi646 om Kim…

“As a result of our long-term involvement with the company and its predecessor, we have a detailed understanding of Bally’s Corporation as well as its business and assets, which will enable us to move quickly to finalize a transaction.”

Plum price:

Bloomberg reported that the proffered $38 per share offer represents an about 30% premium although the overall value of Bally’s Corporation has dropped by approximately 60% since March’s $73.63 high owing to the continued impact of the coronavirus pandemic and the company’s perceived slow start in the American online sportsbetting market.

Conceivable correction:

Jeffrey Stantial from financial services firm Stifel Financial Corporation reportedly told the news service that the official offer from Standard General has drawn particular attention to the undervalued nature of shares in Bally’s Corporation.

Stantial reportedly told Bloomberg…

“We expect this should drive some much-needed price discovery for a stock that has been overly punished, in our view, in the recent macro-driven sell-off.”