Bally’s begins $190m Dutch auction to stave off Standard General takeover fears

Bally’s Corporation has successfully commenced a ‘Dutch auction’ to purchase an 18.8% stake in the business at a cost of no more than $190m.

Shares are to be purchased at prices ranging between $19.25 and $22, with the auction triggered by Bally’s board due to “recent capital markets changes.”

The auction gives common stockholders the chance to liquidate existing share positions in the Bally Bet operator. The auction will run until July 22, unless extended or terminated by Bally’s sooner.

In the event the offer is fully subscribed, common shares representing between 16.4% and 18.8% of Bally’s existing and outstanding shares will be purchased, depending on the price payable in the offer.

Bally’s has said it will fund the purchase of shares with cash on hand and existing financial resources, which may or may not include the firm’s pre-existing revolving credit facilities.

Bally’s largest shareholder, Standard General, which owns 21.7% of Bally’s outstanding common stock, revealed it has made no decision on whether to participate in the auction but has committed to a notice period of six days if it elects to participate.

The auction comes less than a month after Bally’s “terminated” discussions over a potential acquisition of all its outstanding shares by Standard General, the investment fund run by Bally’s chairman Soo Kim.

The move would have effectively taken the company private, with shares being purchased at a price of $38 per share.

At the time, Kim suggested this deal would enable shareholders to “realize an attractive value,” however these overtures were ultimately rejected by the committee.

Elsewhere, media reports have suggested Bally’s will finally launch its Bally Bet sportsbook in New York, ending a near six-month voluntary exile from the mobile sports betting market.

New York-based sports betting site PlayNY has suggested the launch will be prior to July 1.

Bally’s was among nine operators to receive a New York sports betting license in November 2021 but did not launch its sportsbook offering when the market went live in January.

Kim later confirmed that Bally’s would delay its launch, out of a desire to avoid what he called the promotional “bloodbath” taking place in the New York market at the time.

Many licensed operators including FanDuel, DraftKings, Caesars, and BetMGM deluged bettors in the market with promotional offers and free money in order to gain early market share.

The launch of the Bally Bet sportsbook in the Empire State, if confirmed, will bring the New York sportsbook market up to full strength.