Bally's committee is reportedly in discussions with Standard General
A special committee of Bally's (NYSE: BALY ) independent directors, set up to review a takeover bid from Standard General, is reportedly in talks with the hedge funds that are the region's casino operator's largest shareholders.
Bally shares rose sharply on Tuesday after CTFN reported that a committee formed by Bally on March 12 was in talks with Standard General over a $15 per share takeover offer it made on March 11. Bally director Soo Kim is the founder of the asset management company and owns about 23% of the gaming company. He is not a member of the special committee.
CTFN cited an unnamed person familiar with the matter as saying that Bally's may make an announcement about the tender offer soon, but it's unclear what will be announced or when it will take place. The outlet previously reported that the Rhode Island-based gaming company was paying more attention to the offer than Standard General's $38 per share offer in March 2022.
On March 28, the special committee notified investors that it had hired Macquarie Capital as a financial advisor and Potter Anderson & Corroon LLP and Sullivan & Cromwell LLP as legal advisors.
Opinions divided on Bally’s takeover bid
The panel of directors reviewing the takeover bid noted that no decision had been made as of March 28 and there was no guarantee the deal would go ahead.
"The Special Committee cautions Bally shareholders and others considering trading in the company's securities that no decision has been made regarding the proposal," the committee said in a statement. "There can be no assurance that a final offer will be made or accepted, that any agreement will be executed, or that any transaction will be completed."
While some analysts believe Bally's should accept the takeover offer, it likely won't, but one investor recently said Standard General's latest takeover bid is opportunistic and doesn't have the best interests of shareholders in mind.
In a letter to Bally's board last week, K&F Growth Capital, which owns 1% of the casino operator, encouraged directors to reject the takeover bid. Additionally, K&F urged directors to consider pursuing expensive projects in Las Vegas, abandoning Vegas and Metro. York and is seeking a partner for Bally's $1.1 billion casino-hotel in Chicago. The asset manager also said gaming companies should consider selling assets to reduce debt.
Barry is in trouble
Amid substantial credit downgrades, the operator sinks further into scrapping, and as the company seeks $800 million to complete its permanent casino resort in Chicago, Bally's may find itself in a precarious position - An invitation to advance payment is standard.
The hedge fund promised to complete the Chicago project if it successfully acquired the gaming company. If the deal is completed, further plans following the acquisition are currently unclear.
There is speculation that if the Bally takeover is successful, Standard General may sell some of the gaming operator's real estate to improve its balance sheet and potentially prepare for another initial public offering (IPO) in a few years.
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Source: www.casino.org
