Earnings+More - Investor rails at low-ball Bally’s bid
Investor rails at low-ball Bally’s bidActivist takes aim at Standard General, MGM Resorts downward revision, Endeavor take-private move +More
And I hope to God I'm not as numb as you make out. Standard General under attackThere must be a better world somewhere: An investor in Bally’s has suggested the company’s independent board committee should reject what it called an attempt by major shareholder Standard General to take the business private “on the cheap”. In a letter to the directors, investment firm K&F Growth Capital proposed a “ready-made, executable” six-point plan to return Bally’s to growth.
No confidence: K&F, formed by investment veterans Edward King and Dan Fetters who are both also partners at gaming-endemic VC Acies Investments, said the market has “lost confidence” in the company’s current strategy and its financial stability.
Peak to trough: Bally’s down 80% from its March 2021 high Six steps to heaven: Among the half-dozen proposals put forward was a sale of the international interactive unit – the old Gamesys business – which as Earnings+More reported yesterday is already the subject of speculation post a successful Standard General buyout.
Zinger: Moreover, K&F suggested a US public company “should not be in the business of supplying gaming equipment and operations to the Japanese market under the country’s current regulatory framework.” The Japanese link also has “negative implications” for Bally’s access to capital.
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Horror show: As for the US online strategy, K&F were scathing. “The strategy employed over the last three years has been an unmitigated disaster,” it argued. A litany: The investor called out the three acquisitions of Bet.Works, SportCaller and Monkey Knife Fight, bought for a combined $300m+ and since written off, the soon-to-be-abandoned partnership with Sinclair and the cumulative losses to date of $125m.
Back to the future: Rounding up its proposals, K&F suggested that if the company followed its plan it would then be in a position “not too dissimilar” to the situation prior to 2020 when the company was able to acquire “compelling and synergistic” casino resort assets.
+MoreDone deal: Gambling.com has announced the completion of the $37.5m acquisition of Freebets.com and associated assets from XLMedia. Charles Gillespie, CEO, said of the deal for the UK-facing sites that “while expansion of gambling in the US grabs all the headlines these days, many of the industry’s most attractive markets remain in Europe.” Weathering the storm: Analysts at Macquarie noted that DraftKings and Flutter have seen their respective share prices hit by the spate of negative headlines affecting the sports-betting sector in recent days.
⛈️ DraftKings and Flutter shares take a hit By the numbersOhio: Total gaming GGR declined 5% in Feb to $264m with B&M flat at $197m but sports-betting GGR down 18% to $66.3m. Handle was up 5% to $671m. Virginia: Sports-betting GGR rose 57% in Feb to $44.5m on handle that rose 26% to $545m. Careers+MoreGAN has appointed interim CFO Brian Chang as permanent CFO. Endeavor’s take-private moveLights out: OpenBet and IMG Arena’s brief life within the public spotlight is coming to a premature end after parent company Endeavor announced its majority shareholder Silver Lake would be acquiring the shares it doesn’t already own, valuing the sports and entertainment business at $13bn.
Recall, Endeavor completed the acquisition of OpenBet for $800m in late 2022 and added it to its existing IMG Arena sports data provision business unit. In Q4, the company said the sports data and technology division generated revenues of $114m, up 5% YoY. The segment’s adj. EBITDA stood at $20.5m, down 5% YoY. Innovation sits at the heart of everything we do at Soft2Bet so it was highly rewarding to win the In-House Innovation of the Year prize at the EGR Nordics Awards 2024. Motivational Engineering Gaming Application (MEGA), the industry-leading gamification system we unveiled at ICE London 2024 was recognised by the EGR judges. Congratulations to all our teams for making this product a reality! MGM Resorts analyst takePost-game analysis: The team at Jefferies have lowered their estimates for how MGM’s Las Vegas Strip properties performed in Q1, suggesting the “lift” from the Super Bowl in February was “strong [but] lower” than initial forecasts. The team now sees MGM’s Las Vegas properties as bringing in $2.24bn of revenue and $825m of adj. EBITDA.
+More takesFlutter: JMP said one of the takeaways from Flutter’s recent earnings was the strength in iCasino, with the implication of market growth accelerating through March even while FanDuel’s share remained flat. Overall, the team suggested they expect iCasino to “provide upside” for revenue and EBITDA in Q124 for online gaming divisions. Calendar
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