Bally’s Corporation announced the final terms of its planned acquisition of Gamesys Group Plc this morning, after reaching an agreement in principle last month.
The merged company will be based in Providence, Rhode Island, and its shares will continue to trade on the New York Stock Exchange, while Gamesys will be delisted from the London Stock Exchange.
In addition, Gamesys’ CEO, Lee Fenton, will remain in his place, while the company’s COO, Robson Reeves, and Non-Executive Director, Jim Ryan, will join the board of directors in the United States.
Meanwhile, Bally’s CEO George Papanier will continue to serve on the board as a Senior Executive, with primary responsibility for the company’s retail casino operations.
Soo Kim, Chairman of Bally’s Corporation said: “We believe that this combination will mark a transformational step in our journey to become a leading integrated, omni-channel gaming company with a B2B2C business.”
Bally’s signed an “agreement in principle” for Gamesys acquisition last month, offering a purchase price of over £2 billion.
Bally’s bid to Gamesys shareholders amounted to £18.50 cash a share, representing an almost 40 percentage premium on the British company’s share price of £13.30 on January 25.
Strategic and financial incentives
Gamesys announced the proposed acquisition, saying that a “possible combination” would provide strategic and financial incentives to its shareholders.
Kim added: “We think that Gamesys’ proven technology platform alongside its highly respected and experienced management team, combined with the US market access that Bally’s provides, should allow the combined group to capitalise on the signiﬁcant growth opportunities in the US sports betting and online markets.
“We are truly excited about the opportunities that this combination would oﬀer and the enhanced and comprehensive experience and product oﬀering that it would enable us to oﬀer our customers.”
The acquisition has a clear strategic and financial basis, will generate long-term value for both firms, and would be compatible with the companies’ respective long-term growth plans, according to both parties’ board members, who echoed Gamesys’ March comment.
Bally’s has secured interim funding from a number of foreign banks, including Barclays Bank, Goldman Sachs USA, and Deutsche Bank Aktiengesellschaft.
The US entertainment conglomerate has already reported that it plans to use one or more financial market transactions to refinance Gamesys loans and the bridge facility.
In addition to a company-wide bank credit facility, this refinancing may include both public and private sales of Bally’s stock or other assets.
Chairman of Gamesys Neil Goulden has this to said: “The combination would give unique optionality to Gamesys shareholders. The recommended cash offer, including the Gamesys FY20 dividend, provides a 41.2 per cent premium to the Gamesys share price at the time of the original proposal from Bally’s and is at a significant premium to the all-time high Gamesys share price prior to the 2.4 announcement.
“However, should Gamesys shareholders wish to invest in a business with a strong foothold in the high-growth US gambling market, combined with established markets in the UK and Japan, they can elect for part or all of their holding to be converted into Bally’s shares.”