Standard General seeks to acquire remaining share in Bally’s

Hedge fund Standard General said on Monday that it would seek to acquire the stake that it does not already own in Bally’s, and assume full ownership of the gaming, betting, and interactive entertainment company. Standard General already owns a 23% stake in the company and it is its largest shareholder.

Yet, the fund is looking to consolidate its hold of the company, not least following the launch of Bally’s in Rhode Island as the state’s exclusive online casino operator. The hedge fund offered to buy out the remaining shares at $15 a share, which constitutes a 41% premium on the company’s last closing price on Friday last week.

The buyout attempt is not entirely surprising, as Standard General has made its intention to pursue the full acquisition of Bally’s on several occasions, first as rumors, and then as a tangible offer in 2022, when the fund proposed $38 per share to buy out the company. The deal would have pinned the company’s value at $2bn.

Fast forward to this week, and the deal values the company at closer to $684m, a significant decrease. Despite the lower offer, Standard General is fairly confident that Bally’s would appoint a special committee, including its independent directors, who will review the proposal.

If they are given a green light, the deal will be able to move forward. Standard General is also confident about the timing of the offer, as it has cited financial sources that have confirmed that there should be few hurdles to clear and minimum resistance. In a filing to the US Securities and Exchange Commission, the fund explained:

"Our proposed transaction would allow the company’s stockholders to immediately realize 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."

Standard General has hired Fried, Frank, Harris, Shriver & Jacobson LLP as the fund’s legal advisor for the duration of the negotiation and potential buyout.

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