No rollover

24 March 2021 By Liam Proud Follow @liamwardproud

U.S. casino operator Bally’s agreed to buy Britain’s Gamesys for $3 bln. Some aspects of the deal make it look like a reverse takeover. Yet the terms for UK shareholders being asked to cash out seem stingy. Investors hoping for a higher price have a strong argument.

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British gambling company Gamesys on March 24 agreed to a takeover by U.S. casino operator Bally’s. The cash offer of 18.50 pounds per share values Gamesys equity at just over 2 billion pounds.

Bally’s has also proposed a stock alternative offer of 0.343 shares per Gamesys share. Based on Bally’s closing price on March 23 and current exchange rates, that would imply a value of 16.61 pounds per share.

The cash offer represents a 13% premium to the Gamesys share price on March 23, and a 39% premium to the share price on Jan. 25, the day before Bally’s approached Gamesys.

Founders and current executives of Gamesys, who between them hold 24.5% of the company’s shares, have agreed to accept the stock alternative.

Gamesys Chief Executive Lee Fenton will become CEO of the combined group.

Gamesys shares were trading at 19.40 pounds at 1418 GMT on March 24. Bally’s shares were up 9% at $72.

Context News

British gambling company Gamesys on March 24 agreed to a takeover by U.S. casino operator Bally’s. The cash offer of 18.50 pounds per share values Gamesys equity at just over 2 billion pounds.

The cash offer represents a 13% premium to the Gamesys share price on March 23, and a 39% premium to the share price on Jan. 25, the day before Bally’s approached Gamesys.

Founders and current executives of Gamesys, who between them hold 24.5% of the company’s shares, have agreed to accept the stock alternative.

Gamesys Chief Executive Lee Fenton will become CEO of the combined group.

Gamesys shares were trading at 19.40 pounds at 1418 GMT on March 24. Bally’s shares were up 9% at $72.

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