Bally’s Corp. has agreed to be bought out by its largest shareholder — a deal that could shore up the casino company’s fiscal outlook as it looks to build a new resort on the site of the Tropicana Las Vegas that will adjoin the future home of the Oakland Athletics on the Las Vegas Strip.
Standard General, a New York hedge fund that owns 23 percent of Bally’s, will acquire the company’s outstanding shares for $18.25 per share — a 71 percent premium to the company’s average stock price during the past month. The transaction announced Thursday valued Bally’s at $4.6 billion.
Bally’s Chairman Soo Kim, who is also the chairman of Standard General and has made several buyout offers for Bally’s in the past two years, told The Nevada Independent in an email that the agreement was “an affirmation by the large shareholders of Bally’s that our future is bright and we are optimistic.”
Bally’s operates 15 casinos in 10 states — including Bally’s Lake Tahoe in Stateline — and other gaming businesses.
The 36-acre Tropicana site is where the Athletics are planning to build a partially publicly funded $1.5 billion stadium on 9 acres to relocate the Major League Baseball team to Las Vegas. The parcel on the southern end of the Strip is owned by Gaming and Leisure Properties. Bally’s retained the rights to develop a project in conjunction with the stadium.
Kim said the stock agreement would help Bally’s in “capturing the potential of the Tropicana redevelopment and [the] ballpark.”
The Tropicana, which closed April 2, is expected to be imploded in October. The A’s are expected to break ground on the 33,000-seat ballpark by April. Last week, an A’s representative told the Las Vegas Stadium Authority the team was in “good shape” on securing financing for the ballpark, but didn’t offer specific details on how the franchise will fund its expected $1.2 billion share of the construction costs.
Bally’s executives didn’t comment beyond the announcement.
Earlier this month, Bally’s reached a financing agreement with Gaming and Leisure to fund the construction of a $1.8 billion casino resort in downtown Chicago. Truist Securities gaming analyst Barry Jonas said the agreement could provide a road map to how Bally’s can fund the Las Vegas resort.
On Thursday, Jonas wrote in a research note that the deal — which may not be completed until the first half of 2025 — could concern investors because of Bally’s long-term debt, which stood at $3.7 billion at the end of March. However, he said the stock agreement would be helpful.
“The company today has several growth opportunities ahead, including the permanent Chicago casino [and] optionality with the A’s site in Vegas,” Jonas wrote.
The stock transaction allows shareholders to retain their shares through a rollover election since the company will remain publicly traded, despite earlier efforts by Kim to take the company private. Bally’s will also merge with Standard General-owned Queen Casino & Entertainment, a regional casino operator with four properties in three states.
As part of the announcement, Standard General reached an agreement with Gamesys founder Noel Hayden, whose company was purchased by Bally’s in 2021, and Sinclair Broadcast Group. Both entities own large blocks of Bally’s stock and agreed to roll over their shares into the combined company. Standard General, Hayden and Sinclair will control 47 percent of Bally’s.
Stifel Financial gaming analyst Jeffrey Stantial wrote in a research note Thursday that it was “logical” that Standard General, which made other buyout offers for Bally’s in the past two years, finally completed a deal.
“We expect most investors will elect for the certainty provided by the cash offer versus [the] equity rollover,” Stantial wrote, suggesting it would cost Bally’s more than $515 million to buy back the stock from other investors.
