Bally’s Corporation is making the headlines again after an announcement Wednesday it reached a principle agreement to merge with Gamesys Group in a cash deal worth in excess of £2 billion.
Teasing Investor Appetite
The news for the possible combination stirred into action investors at London FTSE250 and the demand for Gamesys shares caused the price to jump 17% making the gaming technology company the best performer on the smaller company index in a day when FTSE250 was marginally up and the main FTSE100 remained flat.
“We believe that this combination would mark a transformational step in our journey to become a leading integrated, omni-channel gaming company with a B2B2C business.”
Soo Kim, Chairman, Bally’s Corporation
According to the announcement from the boards of Gamesys and Bally’s, the Rhode Island-based company is offering £18.50 in cash per share, a market valuation of more than £2 billion.
Bally’s noted the proposed price offers almost a 40% premium on the share price of £13.30 on January 25, the day when the initial approach to Gamesys was made, but compared to the market close on March 23, the day before the announcement, the offer represents a 12.7% premium.
Shareholders at Gamesys will also be given the option to get 0.343 of new Bally’s shares in lieu of part or all of the cash consideration under the deal, which seeks to expand the digital portfolio of the US gambling company.
“We think that Gamesys’ proven technology platform alongside its highly respected and experienced management team, combined with the U.S. market access that Bally’s provides, should allow the combined group to capitalize on the significant growth opportunities in the U.S. sports betting and online markets.”
Soo Kim, Chairman, Bally’s Corporation
Strategic and Financial Value for Shareholders
The board at the gaming technology company signaled in the announcement it accepted Bally’s approach for a possible tie-up, outlining the strategic and financial benefits for shareholders the transaction would bring in the future.
“From our first meeting to now it has been the entrepreneurial energy of the two businesses that has brought us to the edge of creating a uniquely powerful company.”
Lee Fenton, CEO, Gamesys Group
Both parties announced there was no guarantee a deal would be completed, but if the deal goes through, the combined group would be based in Rhode Island and would be traded on the New York Stock Exchange.
Personnel-wise, Gamesys CEO Lee Fenton would become the CEO of the new digital unit at Bally’s, while two of the Gamesys directors would join Bally’s board.
The approach to merge with the FTSE250-listed company is the latest in a series of strategic moves undertaken by Bally’s Corporation. Having acquired multiple land-based casinos mainly from the Eldorado-Caesars merger, the casino operator from Rhode Island switched its focus to the digital space.
Bally’s Corporation acquired sports betting solutions provider Bet.Works and daily fantasy sports operator Monkey Knife Fight (MKF), besides entering into agreement for the naming rights of Fox Sports regional networks with Sinclair Group, and finished its buying spree with the recent acquisition of free-to-play game provider Sportcaller.