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Hedge fund Standard General has sent a letter to Bally’s Corporation offering to purchase the entire company for $15.00 per share.

Bally’s shares shot up 26.18% in morning trading today (11 March) to $13.40, after the business received the acquisition offer from Standard General, currently its largest shareholder.

The New York hedge fund already owns approximately 23% of the company’s total shares.

Standard was founded by Soohyung Kim (pictured), previously Bally’s chairman, and who now serves as an independent director on the company’s board.

The $15.00 per share offer represents a 41% premium on Bally’s share price as of 8 March 2024. The offer gives the company an enterprise value of $773m.

Standard General said it expects Bally’s board to appoint a special committee composed of independent directors to consider the proposal.

If approval by this committee is not secured, the fund said it would not move forward with the proposed transaction.

Standard also emphasised that a decision in the negative by the body would not affect its relationship with Bally’s, and that it would remain committed to being a long-term shareholder.

Based on Standard’s “experience and familiarity” with the company, as well as discussions with financing sources, it said it did not anticipate any issues in securing financing for the deal.

“Our proposed transaction would allow the company’s stockholders to immediately realise a premium price, 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 publicly-listed company,” said the fund.

“We would also be prepared to permit stockholders to elect to “roll-over” all or a portion of their company shares into equity of the post-closing company.”

Second time lucky?

The offer is the second time the US hedge fund has offered to purchase the company, after Standard General pursued a similar bid in January 2022.

Valuing the business at $35.00 per share, that deal would have seen shareholders receive a significantly higher price than Standard’s 2024 offer.

That deal was ultimately rejected by a Bally’s special committee in May 2022. Then CEO Lee Fenton highlighted significant opportunities including the integration of the Gamesys acquisition and the expansion of the North American interactive business.

Bally’s share price has steadily declined March 2021, as prospects for the company’s digital business have dimmed.

While having made some gains in online casino, the business is not generally considered one of the winners of the US online gaming market share wars.

In January 2023, Bally’s announced it would be cutting 15% of its North American interactive staff count as part of wider restructuring initiatives.

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