Bally’s (NYSE:BALY) should accept Standard General’s $15 a share takeover offer, but the casino company likely won’t, according to a Wells Fargo analyst.
“We think BALY’s should take this deal, but it’s hard to imagine they will,” Wells Fargo analyst Daniel Politzer, who has an underweight rating and a $9 price target, wrote in a note on Monday.
The note came out before Bally’s (BALY) on Tuesday said its board formed a special committee to evaluate the $15 offer. Disclosure of the takeover bid for all of Bally’s shares that Standard General didn’t already own sent Bally’s shares surging 28% on Monday.
The Standard General bid represents a “modest premium” to the regional peer’s avg. ~7.5x 2024 estimated EV/EBITDA, though is mostly similar to the Standard General $38 a share offer that the board rejected in 2022.
“BALY is at an interesting juncture: it could make sense to go private now, get Chicago financed/built, delever via SLBs, and get NA Interactive on track, then return to public markets in several years w/ higher EBITDA and an improved B/S,” Politzer wrote.
