Casino operator Bally’s Corp. has turned down a buyout offer from its chairman’s investment firm.
Bally’s, which is acquiring the Tropicana hotel-casino on the Strip, announced Thursday that a special committee of its board of directors has “terminated consideration” of New York-based Standard General’s proposal to acquire all of the shares in Bally’s that it does not already own.
The Rhode Island-based casino company also announced that its board determined Bally’s “should pursue initiating a cash tender offer for its shares,” and that the offer is expected to involve $300 million to $500 million.
Bally’s has “very substantial opportunities before it,” including the expansion of its land-based footprint in the U.S., CEO Lee Fenton said in a news release.
“With these opportunities in front of us, we have great confidence in the future as we move forward,” Fenton added.
Bally’s Chairman Soohyung Kim, managing partner of Standard General, said in the release that while “we are of course disappointed with the outcome of the discussions of our proposal, as we said from the outset, we intend to remain a supportive, long-term investor” in Bally’s.
Kim offered in January to buy the shares in Bally’s that his investment group didn’t already own for $38 apiece, saying it represented a 30 percent premium over the previous day’s closing price.
The proposal would let Bally’s shareholders “immediately realize an attractive value, in cash, for their investment,” Kim wrote in a letter to the board at the time.
Standard General is Bally’s largest shareholder with more than 20 percent of its stock, Kim wrote, adding he does not “anticipate any issues in securing financing for the transaction.”
This is a developing story. Check back for updates.
Contact Eli Segall at firstname.lastname@example.org or 702-383-0342. Follow @eli_segall on Twitter.