Bally’s completes ‘Dutch auction’ tender offer

Bally’s has confirmed the purchase of stock worth over $108m through a modified ‘Dutch auction’ process.

A total of 4,858,465 shares were acquired as part of the auction at a price of $22 per share, inclusive of 2,143,640 common shares tendered through a notice of guaranteed delivery.

Total proceeds of the acquisition amounted to $108,886,230, or 9.2% of Bally’s outstanding common shares.

The acquisition percentage is less than half of the 18.8% stake that Bally’s originally intended to acquire in its initial disclosure of the Dutch auction process in June.

Bally’s currently has $334.6m available for use under its previously announced capital return program, which can be used for future share repurchases.

The operator’s initiated the auction after terminating discussions over a potential acquisition of all its outstanding shares by Standard General, the investment fund run by Bally’s chairman Soo Kim.

The move would have effectively taken the company private, with shares being purchased at a price of $38 per share.

At the time, Kim suggested this deal would enable shareholders to “realize an attractive value,” however these overtures were ultimately rejected by the committee.

As part of the Dutch Auction, Standard General sold 360,000 shares at prices ranging from $19.25 to $22. However, Standard General is still the largest investor in Bally’s, owning 11.24 million shares, or a 21.7% stake in the firm.

Last month, Bally’s agreed the sale of two Rhode Island casino properties – Bally’s Twin River Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel – for a total consideration of $1bn to GLP Capital.

A common practise among US casino operators is to sell casino properties with the acquiring party leasing the property back to the seller under a rental agreement. That seller is then responsible for the day-to-day running of the casino property.

This latest deal will see Bally’s pay incremental rent of $76.3m over a master lease term of 15 years.