Updated January 27, 2022 - 6:58 am
An investment firm led by the chairman of Bally’s Corp. has offered to buy out the casino operator slated to take charge of the Tropicana this year.
Soohyung Kim, managing partner of Standard General, wrote a letter Tuesday to Bally’s board of directors offering to buy the shares his New York investment group doesn’t already own for $38 apiece, saying this represents a 30 percent premium to Monday’s closing price.
The proposal would let Bally’s shareholders “immediately realize an attractive value, in cash, for their investment,” Kim wrote.
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.”
According to The Wall Street Journal, the deal values Bally’s at more than $2 billion.
Christopher Jewett, vice president of corporate development at Bally’s, said in a statement to the Review-Journal that the proposed buyout would not impact Bally’s pending acquisition of the Tropicana, which sits on 35 acres along the Strip and boasts 1,470 rooms and 50,000 square feet of casino space.
Jewett said the Tropicana deal is expected to close this year but did not say when exactly.
Bally’s stock soared on the buyout offer, closing Tuesday at $35.85, up 22.65 percent, or $6.62, according to data on Yahoo Finance.
Rhode Island-based 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 that it reached a deal to acquire the Tropicana from the resort’s landlord, Gaming and Leisure Properties, in a deal valued at about $308 million.
Bally’s said the Tropicana’s “non-land assets” were selling for $150 million and that it had agreed to lease the land underneath the hotel-casino from Gaming and Leisure Properties for an “initial term” of 50 years at $10.5 million in annual rent.
At the time, Bally’s said the transaction was expected to close in early 2022.
The Tropicana is currently operated by Penn National Gaming.