Bally’s Corporation has officially entered into a definitive merger agreement with Standard General L.P., marking a significant development in the casino and entertainment sector. This merger is the culmination of multiple acquisition attempts by Standard General, starting with a bid in 2022 at $38 per share and a more recent offer at $15 per share earlier this year.

Bally’s Corporation Merges with Standard General L.P.: A Strategic Move in the Casino Industry

A Brief History of Acquisition Attempts

Standard General’s persistence in acquiring Bally’s is notable. The initial bid in 2022 was set at $38 per share, which was subsequently lowered to $15 per share in early 2024. This reduction sparked criticism from Bally’s investor K&F Growth Capital, which accused Standard General and its Managing Partner, Soo Kim, of attempting to “acquire Bally’s at a fraction of its fair value.” K&F Growth Capital highlighted concerns regarding the use of Bally’s already overstretched balance sheet to fund the acquisition.

The Agreed-Upon Merger Terms

The finalized offer stands at $18.25 per share, representing a 71% premium on the volume-weighted average price per share as of March 8, 2024. This date is significant as it marks the last trading day before the initial cash acquisition proposal of $15.00 per share. This merger not only reflects a substantial premium but also positions Bally’s for future growth and expansion.

Strategic Merger with The Queen Casino & Entertainment

In this strategic merger, Bally’s will combine with The Queen Casino & Entertainment (QC&E), a regional casino operator majority-owned by Standard General. Robeson Reeves, CEO of Bally’s, emphasized the strategic benefits of this merger, stating, “The addition of four complementary properties through this merger to our existing 15 domestic casino properties will add further geographic and market diversity to our portfolio.”

Geographic and Market Expansion

The merger brings a total of 19 casino properties under Bally’s umbrella, significantly enhancing its geographic reach and market presence. This expansion is poised to drive additional revenue and EBITDAR growth. Robeson Reeves further elaborated on the merger’s potential, “With QC&E’s development pipeline recently completed or already well underway, we see a path toward additional revenue and EBITDAR growth and value accretion as those projects are completed in 2025.”

Development Pipeline and Future Prospects

QC&E’s development projects, which are either completed or nearing completion, play a crucial role in Bally’s future growth strategy. These projects are expected to contribute significantly to the company’s revenue streams and overall market value. This merger positions Bally’s to leverage these new assets effectively, ensuring sustained growth and profitability.

Financial Implications and Enterprise Value

The transaction values Bally’s at approximately $4.6 billion in enterprise value. This valuation underscores the strategic importance of the merger and its potential to enhance shareholder value. The merger agreement also ensures that the combined company will remain a publicly traded registrant under the Securities Act of 1934. This provision allows Bally’s stockholders to retain their stock in a rollover election to the combined company, offering them the opportunity to participate in the company’s long-term growth.

Shareholder Benefits and Future Opportunities

Soo Kim, Managing Partner of Standard General, highlighted the benefits for Bally’s stockholders, “The transaction provides Bally’s stockholders with a significant cash premium along with certainty of value for their investment or, if they elect to retain their shares, the opportunity to participate in the longer-term growth prospects of our expanded portfolio and significant development pipeline.”

Leadership and Strategic Vision

The combined entity will benefit from the strategic leadership of both Bally’s and Standard General. Soo Kim expressed optimism about the merger’s future prospects, “The addition of the complementary QC&E assets builds upon the company’s attractive growth profile. We look forward to working with the Board of Directors and the company’s senior management team as they continue to execute on their business plan.”

Conclusion: The Merger

The merger between Bally’s Corporation and Standard General L.P. marks a significant milestone in the casino and entertainment industry. This strategic move not only enhances Bally’s geographic and market presence but also positions it for sustained growth and profitability. The merger’s financial implications, combined with the leadership and strategic vision of both entities, promise a bright future for Bally’s and its stockholders.

FAQs About Bally’s Corporation Merger with Standard General L.P.

1. What is the recent development between Bally’s Corporation and Standard General L.P.?

Bally’s Corporation has entered into a definitive merger agreement with Standard General L.P. This merger is significant in the casino and entertainment industry, resulting from multiple acquisition attempts by Standard General over the past years.

2. What were the previous bids made by Standard General to acquire Bally’s?

Standard General initially bid $38 per share in 2022 and then offered $15 per share earlier in 2024. The agreed-upon final offer is $18.25 per share.

3. Why was the lower offer of $15 per share criticized?

The lower offer of $15 per share was criticized by Bally’s investor K&F Growth Capital. They accused Standard General and its Managing Partner Soo Kim of trying to acquire Bally’s at a fraction of its fair value using Bally’s already overstretched balance sheet as the source of funds.

4. What is the agreed-upon offer per share for the merger?

The agreed-upon offer per share for the merger is $18.25, representing a 71% premium on the volume-weighted average price per share as of March 8, 2024.

5. What does the merger with The Queen Casino & Entertainment (QC&E) involve?

The merger involves Bally’s combining with The Queen Casino & Entertainment (QC&E), a regional casino operator majority-owned by Standard General. This merger adds four complementary properties to Bally’s existing 15 domestic casino properties.

6. How will the merger impact Bally’s geographic and market presence?

The merger will enhance Bally’s geographic reach and market presence, bringing a total of 19 casino properties under Bally’s umbrella. This expansion is expected to drive additional revenue and EBITDAR growth.

7. What is the significance of QC&E’s development pipeline for Bally’s?

QC&E’s development projects, which are either completed or nearing completion, are crucial for Bally’s future growth strategy. These projects are expected to significantly contribute to the company’s revenue streams and overall market value.

8. What is the enterprise value of Bally’s post-merger?

The transaction values Bally’s at approximately $4.6 billion in enterprise value.

9. Will Bally’s remain a publicly traded company after the merger?

Yes, under the Securities Act of 1934, the combined company will remain a publicly traded registrant. Bally’s stockholders may retain their stock in a rollover election to the combined company.

10. What benefits will Bally’s stockholders receive from the merger?

Bally’s stockholders will receive a significant cash premium and certainty of value for their investment. If they elect to retain their shares, they will have the opportunity to participate in the longer-term growth prospects of the expanded portfolio and significant development pipeline.

11. What did Soo Kim, Managing Partner of Standard General, say about the merger?

Soo Kim emphasized the merger’s benefits for Bally’s stockholders and the company’s growth prospects. He stated, “The addition of the complementary QC&E assets builds upon the company’s attractive growth profile. We look forward to working with the Board of Directors and the company’s senior management team as they continue to execute on their business plan.”

12. What is the strategic vision for the merged entity?

The combined entity will benefit from the strategic leadership of both Bally’s and Standard General. The merger aims to enhance geographic and market presence, drive additional revenue and EBITDAR growth, and ensure sustained growth and profitability.