Bally’s Corporation proposes £2bn takeover of Gamesys

The US casino operator Bally’s Corporation has reached an “agreement in principle” to acquire the UK-based Gamesys Group Plc in a deal worth £2bn ($2.74bn).

This comes after the US casino operator completed its acquisition of the US daily fantasy sports operator Monkey Knife Fight earlier this week.

Gamesys Group is an online software development and gaming business that is listed on the London Stock Exchange. The company was formed when JackpotJoy acquired the legacy Gamesys operation for £490m in June 2019.

Bally’s to acquire Gamesys

The boards of both companies have agreed on the terms of the merger, which they said would help the combined business capitalize on growth opportunities in the US gambling market..

The proposal would see Bally’s pay £18.50 per Gamesys share which would represent a 12.7% premium on Gamesys’ closing share price from 23 March. 

Alternatively, shareholders may exchange their holding for 0.343 newly issued Bally’s shares per Gamesys share. 

On 23 March, Bally’s shares were trading at $66.34 per share when the market closed in New York. This means that 0.343 shares would be worth £16.55 at the day’s exchange rate.

Gamesys’ founders and executives, who hold 30.7% of its shares, have agreed to back the deal. The UK-based company’s founders and executives have decided to choose the share offer if the deal goes through.

This means the maximum amount of cash that may be paid on the deal is £1.6bn.

The new entity would see Gamesys’ current chief executive, Lee Fenton, become chief executive of the combined business while two Gamesys directors would join the board.

Meanwhile, George Papanier, chief executive of Bally’s, would remain on the board following the merger and take up a new role overseeing the operator’s land-based operations.

The announcement stated: “Bally’s and Gamesys believe that having a combination of both proven, developed technology and land-based platforms across key US states, with global brands, existing customer bases and complementary product offerings will be key to taking advantage of these growth opportunities.”

The Bally’s board also said that Gamesys would benefit from the operator’s land-based presence in the US, whereas Bally’s would benefit from Gamesys’ technology platform.

Bally’s chair Soo Kim said: “We believe that this combination would mark a transformational step in our journey to become a leading integrated, omni-channel gaming company with a B2B2C business.

“We think that Gamesys’ proven technology platform alongside its highly respected and experienced management team, combined with the US market access that Bally’s provides, should allow the combined group to capitalise on the significant growth opportunities in the US sports betting and online markets.

“We are truly excited about the opportunities that this combination would offer and the enhanced and comprehensive experience and product offering that it would enable us to offer our customers.”

Fenton added: “From our first meeting to now it has been the entrepreneurial energy of the two businesses that has brought us to the edge of creating a uniquely powerful company.

“Our shared passion and vision to capitalise on technology disruption to better serve our customers, wherever they may be, should make for an exciting journey for our employees, customers and shareholders alike.”

Bally’s intends to finance the deal using a bridge facility that will be partly refinanced with a capital raise.

Another massive deal for Bally’s

The US casino operator has been on something of a merger and acquisition spree in recent months. 

Since rebranding from Twin River to Bally’s, after acquiring the brand from Caesars in 2020, the operator has been making serious investments in the US gambling space.

Yesterday, the operator completed its $90m acquisition of the daily fantasy sports company Monkey Knife Fight.  

In February, Bally’s also announced a deal to acquire the free-to-play games provider SportCaller.

The deal will see Bally’s acquire SportCaller which supplies trivia, predictions, pay-to-play and custom free-to-play content to a range of media businesses and sportsbook operators around the globe.

Once the acquisition is complete, SportCaller will make up part of Bally’s interactive division, which was formed after the casino operator acquired Bet.Works in November last year.