Bally's Corporation (NYSE:BALY), a prominent player in the hospitality and entertainment industry, announced on Monday an amendment to its existing merger agreement. The recent modification, known as Amendment No. 2, alters the terms of the original Merger Agreement dated July 25, 2024, which involved Bally's Corporation, SG Parent LLC, The Queen Casino & Entertainment, Inc., and other related entities.
The amendment introduces provisions for the Rolling Share Elections, allowing shareholders to retain their shares post-merger under certain conditions. It also stipulates efforts to assign a new CUSIP number to these shares and ensure their continued trading on the New York Stock Exchange (NYSE) under the ticker symbol BALY.T until the effective time of the merger.
Stockholders interested in the Rolling Share Election must submit their Election Forms by the designated deadline, which is set at 5:00 p.m. Eastern time on the date of the Special Meeting. Those making an election must waive appraisal rights and agree not to transfer their shares until the election is finalized or the merger agreement is terminated.
The amendment also outlines circumstances under which the Rolling Share Elections can be rejected or revoked, particularly if they are likely to delay or prevent the receipt of necessary gaming approvals or adversely affect the conduct of gaming activities by the Surviving Corporation post-merger.
Bally's Corporation has not provided any recommendation to its stockholders regarding the Rolling Share Election, leaving the decision to individual investors. The company has also made it clear that its description of Amendment No. 2 is intended solely to inform investors about the transaction's terms and not to offer any other factual information about the parties involved.
This development follows a series of corporate changes for Bally's, which was formerly known as Twin River Worldwide Holdings (NYSE:TRWH), Inc., with a name change occurring on November 5, 2020. The company's SEC filing indicates that Standard General L.P. and its Chief Investment Officer, Soohyung Kim, who is also the Chairman of Bally's Board of Directors, own a significant share of the company's common stock.
Investors and stockholders are advised to review the materials filed with the SEC regarding the proposed transaction, including the proxy statement and the Schedule 13E-3 Transaction Statement, for a comprehensive understanding of the merger and its implications. The information in this article is based on a press release statement.
In other recent news, Bally's Corporation has demonstrated steady growth and strategic expansion. The company reported a moderate increase of 3% in its Q2 2024 earnings, with revenues rising to $622 million. However, the International Interactive segment experienced a 7% decline, primarily due to the market in Japan. Bally's has also amended its merger agreement, introducing a new Class A Common Stock approved by Bally's Board and a special committee of independent directors.
TD Cowen has maintained a hold rating for Bally's stock, citing the company's decision to not proceed with a $120 million investment for a new casino near Penn State as a strategic move that allows Bally's to concentrate on its primary projects. This decision is expected to bolster the company's financial position and facilitate the timely completion of Bally's anticipated go-private transaction.
In addition, Bally's has embarked on strategic moves, including a $940 million construction and financing deal for its Chicago casino, a merger with The Queen Casino & Entertainment Inc., and the redevelopment of the Tropicana site in Las Vegas.
Despite these advances, Bally's expects an adjusted EBITDA loss of $30 million for the North America Interactive segment in 2024 and anticipates dealing with non-rated play challenges until 2027. These are the latest developments in the company's ongoing efforts to optimize its operations and maintain financial flexibility.
InvestingPro Insights
As Bally's Corporation (NYSE:BALY) navigates this significant merger amendment, InvestingPro data provides additional context for investors. The company's market capitalization stands at $701.15 million, reflecting its current position in the market. Despite a strong 45.82% price return over the past three months, Bally's faces financial challenges.
InvestingPro Tips highlight that Bally's operates with a significant debt burden and its short-term obligations exceed liquid assets. This financial structure could impact the company's flexibility during the merger process. Moreover, the stock's volatility, as noted by InvestingPro, may be of interest to shareholders considering the Rolling Share Election.
On a positive note, management has been aggressively buying back shares, which could signal confidence in the company's future prospects post-merger. However, analysts do not anticipate profitability this year, a factor that potential investors should consider.
For a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide valuable insights into Bally's financial health and market position during this crucial period of corporate restructuring.
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