Following the 2022 rejection of Standard General’s bid to acquire leading gaming brand, Bally’s Corporation, the hedge fund appears to have increased the pressure by offering $15 per share to acquire the corporate stake beyond Bally’s ownership. The bid submitted on March 8, 2024, standing for a 41% increase over Bally’s closing price of the day, reportedly launched Bally’s share price to 30% higher trading levels.
Renewed Bid for a Controlling Stake Acquisition:
As reported, Standard General (SG), holding a 25% stake in Bally’s, offered in January 2022 to take over the remaining 75% stake in the company. As Investopedia reports, SG submitted a $38-a-share bid at the time but Bally’s rejected the offer. As for the latest proposal sent to Bally’s board of directors, the hedge fund reportedly expects the board to ‘’appoint a special committee of independent directors’’ to consider the bid and advise further steps and recommendations.
However, it seems that the hedge company takes care to keep the relief valve open as it adds steam to the engine. According to Investopedia, Standard General pointed out that the lack of support from the committee to recommend the deal will not give rise to any hostile moves to take over Bally’s. The fund reportedly stated that “[they] would not expect [their] relationship with the Company to be adversely affected and would be committed to remaining as a long-term stockholder of the Company.”
Bid Ranging from $38 in 2022 to $15 in 2024:
Still, the current $15 proposal is much below the $38-per-share bid made in January 2022. A source reports that the bid was above the $29.27 closing price for 24 January 2024 offering Bally’s to secure a 28% premium per share. As reported by Investopedia, Bally’s rejected the offer at the time with its former Chief Executive Officer Lee Fenton saying at the time that that company “[had] very substantial opportunities in front of it.”
But Bally’s shares reportedly lost around 25% of their value in 2023 driven by the company’s pre-tax loss reported by a source at $167.6million. In 2024, the share prices soared 28.4% after the recent SG bid. Investopedia reports that the company’s shares followed the recent gain to close on March 11, 2024, at $13.64. Standard General’s offer is reportedly positioned at $15 per share to offer Bally’s to benefit from the $1.36 or, respectively, a 10% premium on the closing price of said day.
Pending Bally’s Decision:
The number of shares covered by the proposal has not been revealed but will more than likely govern the decision pending from Bally’s board. The decision will also likely consider Bally’s overall operations and the prospects of several major developments reportedly made in 2023. The same source reports that the leadership of CEO Robeson Reeves, who rather recently joined the company, brought improvements that are expected to be taken into consideration in the response to Standard General’s bid.
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