Bally’s Corp. (NYSE: BALY) has received a $2.07 billion buyout offer from its largest shareholder, hedge fund Standard General LP, which already holds a 21% stake in the casino operator, The Wall Street Journal said, citing a filing with the Securities and Exchange Commission.
Bally’s Chairman Soo Kim is the founding partner and Chief Investment Officer of New York-based Standard General, which has offered to pay $38 for each BALY share.
The deal is contingent on the approval of Standard General’s special committee of independent directors and outstanding BALY shareholders.
BALY stock gained 22.7% on Tuesday to close at $35.85. The stock was trading 0.9% up in the pre-market session on Wednesday at the time of writing.
Based out of Rhode Island, Bally’s is a gaming, betting, and interactive entertainment company. It owns and operates 14 casinos across ten U.S. states, a horse track in Colorado, and has access to online sports betting licenses in 14 states.
Wall Street’s Take
Following the news, Stifel Nicolaus analyst Steven Wieczynski maintained a Buy rating on the stock but did not provide a price target.
Wieczynski finds the offer encouraging and believes it should provide a floor for the company’s valuation even if the deal does not materialize.
Additionally, Jordan Bender of Macquarie reiterated a Buy rating on Bally’s and lowered his price target to $58 from $79 (61.8% upside potential).
Overall, the stock has a Moderate Buy consensus rating based on 5 Buys and 2 Holds. The average Bally’s price forecast of $53.83 implies 50.2% upside potential. Shares have lost 30.1% over the past year.
TipRanks data shows that financial blogger opinions are 66% Bullish on Bally’s, the same as the sector average.
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