Standard General, an influential hedge fund holding a 25% stake in Bally’s, has initiated another attempt to take full control of the gaming and hospitality company.
This move was disclosed through a non-binding proposal in a filing with the US Securities and Exchange Commission.
Standard General proposes to purchase all remaining outstanding common shares of Bally’s that it does not already own, offering $15 per share.
This offer represents a significant 41% premium over Bally’s last closing price of $10.55 on the NYSE, highlighting the hedge fund’s confidence in the value and potential of Bally’s despite its recent financial challenges.
With Bally’s market capitalization standing over $600 million, Standard General’s offer has already made an impact, sending Bally’s shares up by 25.24% to $13.30.
The proposal is contingent on the approval of Bally’s board of directors and the successful negotiation of definitive transaction documents.
Standard General expects the appointment of a special committee of independent directors by the board to evaluate the offer and provide guidance.
This offer marks the second time Standard General has attempted to take over Bally’s. A previous offer in January 2022 was significantly higher, at $38 per share, reflecting a markedly higher valuation of Bally’s at over $2 billion.
This reduction in the offer price mirrors the financial difficulties Bally’s has faced, including a net loss and a decrease in adjusted EBITDA in 2023, despite efforts to cut costs and new strategic initiatives under the leadership of CEO Robeson Reeves.
Bally’s faced a challenging 2023, with operational costs decreasing by 8.7% to $2.34 billion and a pre-tax loss of $167.6 million, albeit an improvement from the previous year.
Adjusted EBITDA also saw a decline of 3.9% to $527.3 million.
The year was not without strategic moves; Bally’s reduced its North American interactive workforce by 15%, ventured into outsourcing its sports betting technology, and expanded into the UK igaming sector through a partnership with Gamesys’ Megaways Casino site.
These developments, coupled with the financial offer from Standard General, highlight a pivotal moment for Bally’s as it navigates its financial challenges and explores strategic opportunities to enhance its market position and operational efficiency.