Casino operator Bally’s turns down buyout offer

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 on the Strip, announced Thursday that a special committee of its board of directors had “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., and has “great confidence in the future as we move forward, ” CEO Lee Fenton said in a news release.

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 the company.

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.”

Bally’s later announced that its board formed a “special committee of independent and disinterested directors” that was authorized to evaluate the offer.

Bally’s has properties in its home state and others, including New Jersey, Mississippi, Colorado and Nevada, where it operates Bally’s Lake Tahoe.

It announced in April 2021 that it reached a deal to acquire the Tropicana from landlord Gaming and Leisure Properties in a deal valued at about $308 million.

The resort, which sits on 35 acres along the Strip and boasts 1,470 rooms and 50,000 square feet of casino space, could be in for some big changes.

Kim previously told the Review-Journal that Bally’s would “almost certainly” look to rename the property Bally’s and likely look to redevelop the property.

“We’re open to it all,” he said, adding that demolishing the hotel-casino and building something from scratch could be one way to “maximize value.”

One possibility: Major League Baseball’s Oakland Athletics have reportedly looked at the Tropicana as a potential site for a new ballpark in Las Vegas.

“It’s been widely publicized that the A’s are looking at this site,” Gaming and Leisure Chairman and CEO Peter Carlino told analysts during an earnings call last week, adding the baseball team has looked at other properties as well.

Still, the A’s have “a very, very strong interest in our site if the transaction can work to their advantage,” Carlino said.

Contact Eli Segall at esegall@reviewjournal.com or 702-383-0342. Follow @eli_segall on Twitter.