Bally’s Accepts $4.6 Billion Buyout Offer from Standard General, Soo Kim

Bally's announced on Thursday that it had accepted a buyout offer from New York hedge fund Standard General, run by Bally's chairman Soo Kim.

The buyout, which will take place at $18.25 per share, was unanimously approved by a special committee set up by Bally’s to evaluate the offer.

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New Company Combines Bally’s, Queen Casino & Entertainment

The offer was a premium over a previous $15-per-share offer that Kim made in March. He had also previously tried to take Bally’s share in 2022, then offered $38 per share. Kim’s Standard General is the largest shareholder in Bally’s, owning about 26 percent of its stock.

The terms of the deal effectively create a $4.6 billion merger. Bally's will now merge with Queen Casino & Entertainment, another Standard General-owned business that owns four casinos nationwide. The new company would also control all 15 of Bally’s properties, giving it a total of 19 domestic locations in its portfolio.

Investors have the choice to sell their shares in Bally’s for the price—a significant premium over the $13.52 the stock was trading for before the announcement—or roll their shares into the new company. 

Once the buyout was announced, Bally’s saw its share price increase about 25 percent to $16.91 on Thursday afternoon, as investors saw an opportunity to get in on the buyout price.

“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 long-term growth prospects of our expanded portfolio and significant development pipeline,” Kim said in a statement. “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.”

Some Investors Skeptical of Buyout Offer

The buyout offer must still be approved by Bally’s stockholders. Regulatory approvals are also required from the Securities and Exchange Commission. Presuming those conditions are met, Bally’s expects the deal to be closed in the first half of 2025.

There are some investors who seem likely to try to convince shareholders not to approve this transaction. K&F Growth Capital managing partners Dan Fetters and Edward King blasted the Kim offer in a letter to Bally’s board of directors in April, saying that Kim was attempting to take advantage of recent drops in the company’s share price to buy Bally’s at a discount.

“[Kim] proposes to exploit this weakness and acquire Bally’s at a fraction of its fair value, using as a source of funds Bally’s own already overstretched balance sheet,” Fetters and King wrote.

Bally’s ended 2023 with $3.6 billion in debt, a substantial load for a company with only $163.2 million in cash on hand. That balance sheet appeared to jeopardize new investments in the company, including the construction of a permanent casino in Chicago at the former site of the Chicago Tribune printing plant.

However, Bally’s announced last week that it had secured another $940 million to complete the project from Gaming and Leisure Properties, a Pennsylvania-based real estate investment trust.