Standard General has been trying to fully acquire Bally’s for several years and its perseverance finally paid off as its subsidiary, Queen Casino & Entertainment Inc., will now merge with the Rhode Island-based gaming company.
Stock Jumps
Standard General finally got its wish and was granted the opportunity to purchase all of the remaining shares in Bally’s that it doesn’t currently own. Bally’s stock soared after the news broke, spiking 25% on a deal that will pay shareholders $18.25 per share which is 35% over Wednesday’s closing price. According to this deal, Bally’s valuation is $4.6 billion.
Bally’s chairman, Soo Kim, is also the founding partner and Chief Investment Officer of the hedge fund Standard General, which gives this deal much more familiarity than most. According to Bally’s, the offer of $18.25 per share represents a 71% premium over the Company’s 30-day volume-weighted average price per share as of March 8, 2024, which was the last day before Standard General’s initial proposal that began negotiations.
Soo Kim, Managing Partner of Standard General, said, “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.
“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.”
Transition Time
In January 2022, Standard General offered Bally’s investors $38 per share for a buyout but that was ultimately rejected by then-CEO, Lee Fenton, arguing that the company had “substantial opportunities before it”. Those opportunities were squandered as Bally’s spent approximately $90 million on DFS company, Monkey Knife Fight, which was ultimately disbanded less than two years from the time of the acquisition.
Other purchases under Fenton’s reign also proved ill-advised and its full dive into the interactive gaming industry has seen its stock plummet from a high of $70 per share in March 2021 to $16.93 at the time of this writing. Not surprisingly, Lee Fenton stepped down from his CEO post and from the board of directors in March 2023, ceding control to current CEO, Robeson Reeves.
“Our team is well positioned to continue to execute on our initiatives to drive growth across all our segments including in our International Interactive business, North America Interactive, and our Casinos & Resorts (“C&R”) segments, while proceeding with our development pipeline, including construction of our permanent casino resort in Chicago, for which we recently announced a comprehensive financing plan. 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,” said Reeves.
The four complementary properties Robeson referred to are those of Standard General’s subsidiary, Queen Casino & Entertainment Inc., which is the company with which they are merging. Those properties include DraftKings at Casino Queen in East St Louis, Illinois, the Queen Marquette in Marquette, Iowa, as well as the Queen Baton Rouge and the Belle of Baton Rouge, both in Louisiana.
