In a bold move orchestrated by Soo Kim’s Standard General, the hedge fund titan that currently holds a commanding 23% of Bally’s equity, the tables have turned with a generous proposition. The company put forth an intriguing offer to acquire the remaining stake in the regional casino operator Bally’s, presenting a bid of $15 per share. The sum presented rests at a notable 41% premium to the March 8 close, sparking an incendiary buzz around the casino operator’s financial future.
The echoes of the offer reverberated immediately in the economic corridors, catapulting Bally’s shares up by a staggering 26.6% in post-market trading—a volume surge eclipsing the daily average twenty-twofold. Yet, this gambit is but a shadow of the audacious $38 per share bid cast in the waters of January 2022. That former pitch, which grandly valued the casino behemoth at $2 billion, found its fate with rejection.
Within the labyrinthine clauses and covenants of a 13D SEC filing by the fiscal conductor, Standard General delineates its expectations: The Bally’s Board of Directors is to convene a special committee of independent directors tasked with deliberating upon this proposal and rendering a verdict to the Board. The hedge fund’s stance is unequivocal—the transaction shall remain but a blueprint unless sanctioned by this impartial assembly.
In the furtherance of this corporate chess game, the affirmative nod of a majority of Bally’s shareholders, Standard General excluded, is requisite for the deal’s momentum. Kim’s address to Bally’s board brims with the caution that their offer stands as a preliminary “expression of interest”, a declaration that conceals within it the ability to retract the proposition at whim.
The timing of Standard General’s renewed entreaty is nothing if not fascinating. The Rhode Island-based casino operator, once trading at around $20 a year prior, now steers through the tempest of securing a hefty financial anchor for their Chicago casino hotel undertaking—poised as their crowning venture to date.
Amidst the formidable torrents of regional gaming market downturns, escalating wages, cost inflations, UK regulatory tempests, North American digital losses, and the icy drafts emanating from Japan’s online gaming stance, Bally’s weathers the storm. According to Stifel analyst, Jeffrey Stantial, reprieve for some of these embattled fronts is forecasted to crest over the forthcoming quarters, his projection sending hopeful tendrils toward that $15/share benchmark, with the potential for ascent on the backbone of strategic execution.
Stantial lays bare the dramatic disparity between the old implied fortress of $38 per share valuation by Standard General and the new offer presently under scrutiny, speculating that the Bally’s committee shall don the lens of a long-term visionary, rather than be swayed by the transient economic gusts.
Beneath the visible layers of this offer might lie Standard General’s sharp eye upon the treasured real estate held by Bally’s. The assets present a veritable trove of potential liquidity—crucial for the $1.1 billion Chicago project. Although the company has parted ways with some parcels of land for liquid capital, the lion’s share of foundational assets remains dutifully in Bally’s grip. This strategic bid, however, is not an unspoken oath of agreement, nor does it prophesy the emergence of an alternative, lofty suitor.
Stantial critiques the haziness surrounding the proposal’s financial scaffolding, anticipating Standard General’s potential reliance on Bally’s terra firma for fiscal solutions. The firm’s veritable intent to take ownership is palpable, yet skepticism shadows the eventual acceptance of a $15/share endgame. Whether this initial volley from Standard General will swell into a revised offer, history’s pages are rumored to be less than sanguine.
