Bally’s Agrees to Buy Betting Firm Gamesys for $2.7 Billion
(Bloomberg) -- Bally’s Corp. has reached an agreement in principle to buy U.K. online gaming and gambling platform Gamesys Group Plc in a deal valued at 2.02 billion pounds ($2.7 billion) in the latest move by a U.S. casino operator to expand into digital betting.
Bally’s will pay 1,850 pence per share in cash for the company, it said in a statement on Wednesday. That’s a 13% premium from Gamesys’s closing price on Tuesday. The company’s also offering an alternative payment of 0.343 Bally’s shares for every share of Gamesys, or about 1,655 pence apiece.
The casino operator said there’s no guarantee that a firm intention to bid will be made and any offer will be subject to shareholder and regulator approval. Gamesys founders Noel Hayden, Andrew Dixon and Robin Tombs and shareholder HG Vora have indicated that they’ll support the deal, Bally’s said in the statement.
Online gaming has surged during the pandemic and has the chance to grow further in the U.S., where sports betting was legalized in 2018. That has created an opportunity for incumbent gambling brands to expand into digital. Las Vegas-based casino giant Caesars Entertainment Inc. agreed to buy the U.K.’s William Hill Plc, which owns a number of sports betting and digital gambling brands, while MGM Resorts International tried and failed to buy Entain Plc, another U.K. bookie, earlier this year.
Gamesys creates online games, focusing on casino and bingo. Its shares have soared over the past year, alongside rival operators, as online gambling firms have benefited from the lockdown which canceled many traditional sporting events.
“Gamesys’s 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,” Bally’s Chairman Soo Kim said in the statement.
Bally’s is proposing that Gamesys Chief Executive Officer Lee Fenton would become the CEO of the combined group, and two additional Gamesys directors would join Bally’s board.
Gamesys shares jumped 18.76% to 1,950 pence in London trading at 13:10 p.m. on Wednesday. Bally’s closed at $66.34 in New York on Tuesday.
Bally’s has been expanding aggressively, turning what started as a modest Rhode Island horse-track operator into a major player in sports betting. The former Twin River Worldwide Holdings Inc. merged with Dover Downs Gaming & Entertainment Inc. in 2019 to gain a public listing, then made a slew of gambling acquisitions last year. It bought the Bally’s casino in Atlantic City, New Jersey, for $25 million in April, then bought the Bally’s name for $20 million in October.
The Bally brand dates back to a pinball-machine maker founded in 1932. Over the years, it’s been applied to everything from slot machines to fitness clubs. Bally’s Chief Executive Officer George Papanier has said he plans to convert all his casinos to that name within the next year or so.
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