A £2 Billion Merger Between Gamesys and Bally's has been finalized
The two companies have agreed to terms that will see Bally’s acquire Gamesys for £2 billion. Bally’s will pay a 12.7% premium on Gamesys’ closing price.
Bally’s offers Gamesys shareholders options for trading.
Upfront, the 12.7% premium is alluring to shareholders as it would equal £18.50 per share based on the Gamesys’ closing price as of March 23. Alternatively, Bally’s offers these shareholders the opportunity to exchange their holdings for 0.343 Bally’s shares.
0.343 of the new Bally’s shares would be worth £16.55 based on their trading rate of £66.34 on March 23. The amount is lower than what shareholders could get from the premium placed on Gamesys shares but opting for the latter exchange could produce a higher value in the future.
Gamesys execs agree to close the deal.
In any case, the executives of Gamesys have agreed on the deal. These execs contribute to 30.7% of Gamesys shares. The maximum that can be paid in the deal is £1.6 billion based on choosing the share offer.
The current chief executive of Gamesys, Lee Fenton, would continue his role after the merger. The chief executive of Bally’s, George Papanier, would remain on board and later perform some role in running land-based casinos.
An emerging US online market is the motive behind the deal.
Bally’s holds a strong presence in land-based casino operations in the US while Gamesys holds a strong presence in online casinos. Merging the two helps both companies benefit from the other’s strengths.
Bally’s will finance the merger with a bridge facility that’s partially refinanced with capital raise.