Bally’s Corporation’s board of directors announced Thursday it has formed a special committee of independent and disinterested directors, authorized to evaluate the preliminary, non-binding proposal, dated January 25, by Standard General to acquire all of the outstanding shares of Bally’s that it does not already own for $38 in cash per share, as well as any potential strategic alternatives to the proposal. The deal values the company at about $2.07 billion.
New York-based investment firm Standard General, which already owns a 21% majority stake in Bally’s, submitted a letter to Bally’s board detailing the offer to buy the remaining stock. After the proposal, Bally’s shares jumped 22%. The casino operator disclosed the proposition in a filing with the Securities and Exchange Commission.
The proposal letter has Bally’s Chairman Soo Kim’s signature, who is also the founder and managing partner of Standard General. In the text, Kim said that, should the offer be rejected, the equity firm intends to remain a shareholder and that the decision would not adversely affect the future relationship between both parties.
“Our proposed transaction would allow the Company’s stockholders to immediately realize an attractive value, in cash, for their investment and provides stockholders certainty of value for their shares, especially when viewed against the operational risks inherent in the Company’s business and the market risks inherent in remaining a public company,” Standard General wrote.
The letter’s filing said that Standard General expected that the board of directors of Bally’s would appoint a special committee of independent directors to consider the proposal and afterward make a recommendation to the board. It said that Standard General would not move forward with the transaction unless it is approved by such a special committee.
A copy of the proposal letter from Standard General is available as an exhibit to Standard General’s statement of beneficial ownership as publicly filed with the Securities and Exchange Commission. Bally’s said “there can be no assurance that any definitive offer will be made or accepted, that any agreement will be executed or that any transaction will be consummated.”
Rhode Island-based Bally’s has properties in its home state and others, including New Jersey, Mississippi, Colorado and Nevada, where it operates Bally’s Lake Tahoe. It announced last April that it reached a deal to acquire the Tropicana in Las Vegas from the resort’s landlord, Gaming and Leisure Properties, in a deal valued at about $308 million. Bally’s is also bidding to open a new casino in Chicago.
