The gaming company Bally’s Corporation has turned down a takeover proposal from the investor giant Standard General. As of now, the former company will focus on its business and upping the price of its shares.
Bally’s Turned down the Offer
The offer put forward by the investors in January sought to buy out Bally’s at a price of $38 per share. Overall, the deal would have seen the gambling firm sell its business for a little over $2 billion. Bally’s team, however, was concerned about selling so low and waited to see if another investor would come forward with a better proposal.
One of the primary worries was the executives from Gamesys Group, an online gaming software company that Bally’s acquired in October. Back then, Bally’s bought Gamesys for a total of $2.7 billion – a price that is well over what Standard General offers for Bally’s.
In the end, the gambling company rejected the takeover bid on May 5, hoping to boost its business before considering another offer. Bally’s shares have dramatically dropped since the acquisition of Gamesys. At its peak, shortly after the gambling company purchased the software firm, its stock traded for $50 but that price has since declined. As of the time of this writing, Bally’s shares trade for $29 apiece – almost $10 lower than the buyout price proposed by Standard General.
The Gambling Company Seeks to Reinforce Its Business
Soo Kim, the founder of Standard General, shared that he feels rather disappointed that Bally’s turned the offer down but vowed to remain as one of its biggest investors.
Despite the difficulties, Bally’s remains adamant about reinforcing its business once again. According to Lee Fenton, the company’s chief executive officer, there are still “very substantial opportunities” ahead. He listed the integration of the Gamesys acquisition and the expansion in the US market as the two priorities.
Bally’s will now try to boost its business by repurchasing between $300 million to $500 million of its shares back when they are still at a low price. Bally’s opted to do so under a Dutch auction format as it has certain benefits to repurchasing shares on the open market.
It is yet to be seen whether the path taken by Bally’s will be the best one. As of now, it is fairly uncertain if Standard General or another company will contact Bally’s with a takeover proposition in the near future. Perhaps this will give Bally’s some time to stabilize its business and minimize its losses. According to official figures, the company has some NA-based struggles as its business in the region saw the company lose $19 million during the first quarter of the year – a number that is twice as high as Bally’s losses for the same period in Q4 of 2021.
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