Bally’s Takeover Moves Forward After Shareholders Greenlight Deal

Article by : Erik Gibbs Nov 22, 2024

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Bally’s Corporation is moving forward with its merger with The Queen Casino & Entertainment (QC&E) after receiving approval from its shareholders. The merger, valued at $4.6 billion, was proposed by Standard General, Bally’s largest shareholder, which will acquire the company’s outstanding shares at $18.25 each. This price represents a significant 71% premium compared to Bally’s 30-day average share price from early March 2024, when an earlier offer of $15 per share was made.

At a special meeting held on November 19, the merger received overwhelming support from Bally’s stockholders, including those unaffiliated with Standard General. Shares owned by Standard General, Sinclair Broadcast Group, and certain company executives were excluded from the voting process. This ensures fairness and transparency, aligning with regulatory requirements.

Post-merger, Bally’s will remain a publicly traded entity, with shareholders opting to retain their shares temporarily trading under the ticker “BALY.T” on the New York Stock Exchange. This temporary designation will revert to the company’s original ticker, “BALY,” once the merger process is finalized. Bally’s expects to complete the deal in the first half of 2025, pending regulatory approvals and other closing conditions.

The merger combines Bally’s assets with QC&E’s portfolio, which includes four casinos in Illinois, Iowa, and Louisiana. Once finalized, the unified entity will operate 19 gaming properties across 11 states while expanding its digital gaming and sports betting market presence. Standard General Managing Partner Soo Kim emphasized the strategic benefits of the acquisition, highlighting how QC&E’s assets complement Bally’s existing operations and position the company for long-term growth.

Bally’s recent financial performance reflects both challenges and opportunities. For Q3 2024, the company reported $630 million in revenue, a slight 0.4% decline year-on-year. Growth in the UK online segment (up 11.8%) and North America Interactive (up 54.5%) helped offset other areas’ decline.

However, its Casinos & Resorts segment saw a 1.6% drop in revenue, totaling $353.4 million. Adjusted EBITDA also declined slightly, while net losses widened to $247.9 million. CEO Robeson Reeves characterized the results as “relatively healthy” despite these numbers and pointed to progress in key US markets.

Additionally, Bally’s recently agreed to a management buyout of its Asian interactive business, a move CEO Reeves said would enable the division to thrive in pre-regulated markets while allowing Bally’s to focus on monetizing high-margin licensing revenue streams. This strategic divestment aligns with the company’s broader goals under Standard General’s guidance.