A prominent entertainment and gambling entity, Bally’s Corporation, recently undertook a calculated maneuver to acquire a portion of its issued stock. The corporation declared its plan to launch an adjusted “Dutch auction” tender offer, with the goal of buying back up to 19% of its publicly available shares.
This action follows recent volatility in the financial markets. Bally’s governing board established a cost range for the tender offer, suggesting a repurchase of shares at a minimum of $19.25 and a maximum of $22 per share. The aggregate worth of shares targeted in this buyback effort is limited to $190 million.
The tender offer is set to begin on June 24, 2022, and will continue until July 22, 2022, unless Bally’s opts to prolong or conclude the offer sooner. This initiative highlights the company’s dedication to boosting shareholder worth. In alignment with this, Bally’s has also signaled its aim to distribute capital back to shareholders in the future, encompassing the previously disclosed $3.5 billion capital return scheme.
The “Dutch auction” structure provides adaptability in the buyback process. As the tender offer period ends, Bally’s will establish the lowest acquisition cost within the pre-set range. This tactic guarantees that the company repurchases the highest possible volume of shares without surpassing the $190 million ceiling.
It’s noteworthy that all shares submitted in this offer will be acquired at an identical price, which could be above or below the market value of Bally’s stock during or before the tender offer timeframe. Bally’s intends to finance this repurchase program utilizing its current cash holdings and accessible financial means. The company is also equipped to leverage its revolving credit line to secure supplementary funds if necessary, covering related charges and expenditures.
A major investment group, Standard General, holds a considerable portion of Bally’s stock, approximately 22% of the publicly traded shares. They are remaining tight-lipped about their plans, however, and have not determined if they will divest their holdings to Gamesys as part of this acquisition agreement.
Bally’s executives are also staying mum on their strategy. Nevertheless, both Standard General and the upper echelon at Bally’s aim to reassure stakeholders that this will be an open process. They have committed to providing a minimum of six business days’ notice should they opt to sell to Gamesys.
Steering them through the financial intricacies of this transaction are several prominent Wall Street firms. Goldman Sachs is at the helm, with Capital One Securities, Truist Securities, and Wells Fargo Securities also lending their financial acumen.
