Bally’s Shareholders Say Yes to Standard General Takeover

In July, the global casino-entertainment company with a growing omnichannel presence of online sports betting and iGaming offerings, Bally’s Corporation, agreed to a $4.6 billion acquisition by the hedge fund that “pursues a single strategy of opportunistic investing primarily in levered U.S. middle-market companies,” Standard General.

Under the terms, the New York City-based hedge fund, which is Bally’s most important investor, will purchase Bally’s outstanding shares at $18.25 each. 

The price marks a 71% premium over the company’s 30-day average share price as of March 8, the last trading day before an earlier $15 per share proposal from the same entity.

Stockholders Approve Deal

During a special meeting held on November 19, Bally’s stockholders overwhelmingly approved the merger agreement with The Queen Casino & Entertainment (QC&E). 

The latter is a portfolio company majority-owned by Standard General. 

The list of stockholders who expressed support included unaffiliated shareholders who managed to secure the majority vote that was imperative in order for the deal to move forward. 

Shares owned by Standard General, Sinclair Broadcast Group, and certain Bally’s executives were excluded from the voting process.

Public Trading to Continue

Following the merger, Bally’s will remain a publicly traded entity. 

Shareholders who decide to retain their shares will temporarily see them trade under the ticker symbol “BALY.T” on the New York Stock Exchange. 

This will ensure that the shares will remain valid and active during the merger. At the end of the procedure, the ticker will revert to its original symbol, “BALY.” 

The merger is expected to be completed sometime in the first half of next year while still pending regulatory approvals and the standard closing conditions.

Expanded Operations and Growth Potential

Standard General’s managing partner and chief investment officer Soohyung (“Soo”) Kim, highlighted the strategic benefits of the acquisition. 

Kim emphasized the significant cash premium for Bally’s stockholders and the opportunity to capitalize on long-term growth while noting that integrating QC&E assets will strengthen the corporation’s growth prospects.

QC&E currently owns and manages four casinos spread across Illinois, Iowa, and Louisiana, and two sports betting partnerships.

Once the merger is completed, the combined entity will operate 19 gaming facilities across 11 states while offering a diverse portfolio of digital gaming and sports betting services.

“Relatively Healthy” Q3 Results

During the third quarter of 2024, Bally’s reported a 0.4% YoY revenue drop at $630 million. The 11.8% gains in the UK online segment, anticipated in May, and the gains in North America Interactive, also up 54.5%, partially offset declines in other areas. 

Namely, the corporation recorded a 1.6% dip in the Casinos & Resorts segment to $353.4 million. 

Adjusted EBITDA also went down and reached the $137.7 million mark. Net losses widened to $247.9 million. 

Chief executive officer Robeson Reeves described the results as “relatively healthy,” citing progress in key U.S. markets.

Earlier this month, Bally’s finalized a management buyout of its Asian interactive division. 

While it is not certain whether the divestment conditioned the merger, the CEO explained the move would enable the Asian business to focus on pre-regulated markets while allowing Bally’s to generate revenue from high-margin licensing.