Bally’s Boosts Buyback Plan to $350M, Closes Gamesys Acquisition

Posted on: October 4, 2021, 07:22h. 

Last updated on: October 5, 2021, 04:42h.

Bally’s Corp. (NYSE:BALY) said today that its $2.7 billion acquisition of British online gaming firm Gamesys is completed. It’s the company’s largest purchase to date. The purchase is elevating its share buyback program to $350 million.

Bally's Buyback
Bally’s, seen above, closed its Gamesys acquisition. The casino operator also added $350 million to its share buyback plan. (Image: Seeking Alpha)

The regional casino operator announced the Gamesys purchase in March, framing the deal as an avenue to fill an iGaming void in its portfolio. While Bally’s is one of the most acquisitive gaming operators, the bulk of its deals revolve around boosting its US footprint — either with land-based casinos or online sports wagering assets. With Gamesys, the buyer gains entry into the UK’s vibrant iGaming market.

Gamesys’ proven technology platform will foster Bally’s continued build-out of its interactive offerings in North America, including real-money gaming options in Online Sports Betting and iGaming. Additionally, unifying Bally’s and Gamesys’ player databases and technologies provides Bally’s with one of the largest portfolios of omni-channel cross-sell opportunities,” according to a statement issued by the Rhode Island-based casino operator.

Gamesys CEO Lee Fenton is taking the reins as Bally’s chief executive, while George Papanier, who formerly held that title, becomes president of the company’s land-based casino business.

Bally’s Rewards Shareholders with Elevated Buyback

Bally’s is also boosting its share repurchase program to $350 million — a hefty percentage of its $2.24 billion market capitalization.

Like so many peers in the gaming industry, Bally’s halted shareholder rewards last year, including buybacks and dividends, due to the coronavirus pandemic. Soon after the company went public in 2019, the operator then known as Twin River Worldwide Holdings committed $250 million to dividends and share repurchases.

The company repurchased 160,000 shares leading up to the 2020 coronavirus casino shutdown but suspended those plans to conserve cash amid the pandemic. Bally’s is one of a small number of gaming companies to resume share buybacks this year and none in the US have announced plans to boost cash dividends.

“Under the repurchase program, Bally’s can make repurchases from time to time using a variety of methods, including open market purchases, in block trades, accelerated share repurchase transactions, exchange transactions, or any combination of such methods,” according to a statement.

Buyback Positive Sign from Bally’s

Companies embrace share repurchase plans because by reducing their shares’ outstanding counts, earnings per share increase. Additionally, this form of shareholder reward offers flexibility, because companies aren’t obligated to buy back stock under a certain timeline, nor do they have to fulfill the entire amount of the plan.

“The repurchase program does not obligate Bally’s to acquire any particular amount of ordinary shares, and the repurchase program may be suspended or discontinued at any time at Bally’s discretion,” said the company.

Bally’s currently has 48.16 million shares outstanding. Its largest investor is hedge fund Standard General.