PROVIDENCE – Bally’s Corp. expects to spend about $107 million in its recently expired tender offer to buy back a large chunk of its common shares.
The company, which operates the state’s two casinos, made a tender offer to repurchase shares on June 24 using a “Dutch auction” to determine the lowest price per share it can pay to get the most common shares. The offer expired at midnight on July 22.
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Based on the preliminary count by American Stock Transfer & Trust LLC, Bally’s expects to accept for payment and purchase approximately 4,858,465 common shares at a purchase price of $22 per share, for an aggregate purchase price of $106.9 million, excluding fees and expenses relating to the tender offer. These shares represent approximately 9.2% of Bally’s outstanding common shares.
Bally’s was looking to spend $190 million when it made the original tender offer on June 24. The company said at the time between 16.4% to 18.8% of outstanding shares would have been repurchased if the tender offer was fully subscribed.
Bally’s largest shareholder, Soo Kim of hedge fund Standard General, reduced his stake in the gaming company during the tender offer. Kim tendered 360,000 shares ranging between $19.25 to $22 per share. However, Kim remains on Bally’s board of directors and still owns 21.7% of the outstanding shares.
On July 14, Bally’s Executive Vice President Marc A. Crisafulli, who oversees Bally’s operations in Rhode Island, tendered 20,363 shares as part of the offer. Bally’s other directors and executive officers have informed Bally’s that they do not intend to tender their shares in the offer, according to the Securities and Exchange Commission filing.
Bally’s – which has been rapidly expanding its gambling holdings and recently was given the go-ahead to build a $1.7 billion casino in Chicago – said it intends to fund the purchase of shares and to pay the fees and expenses in connection with the offer with cash on hand and existing financial resources, including, if necessary, borrowings under its revolving credit facility.
Bally’s board of directors determined recently it should peruse the offer in light of market changes. Bally’s currently expects to return capital to shareholders in the future, including through its previously announced $350 million capital return program.
On June 28, Bally’s sold the properties and building of its two Rhode Island casinos, Twin River Casino in Lincoln and Bally’s Tiverton Casino & Hotel in Tiverton, in a $1 billion lease-back deal with Gaming & Leisure Properties. Bally’s will lease back both Rhode Island properties and continue to own, control and manage all the gaming operations of the facilities uninterrupted.
Unionized Twin River Casino workers and Bally’s Corp. reached a tentative agreement on a new contract on July 15.
