GYS.L Share News (GYS)

(Sharecast News) - Bally's of the US has agreed in principle to buy Gamesys in a deal that would value the online gaming operator at £2bn.
Under the possible combination Bally's would pay £18.50 cash for each Gamesys share - 12.7% more than the closing price on 23 March and 39.1% higher than Gamesys's closing share price before Bally's initial proposal dated 26 January.

The companies said Gamesys would benefit from Bally's platform in the US as online gaming and sports betting opens up in the world's biggest economy. Bally would gain Gamesys's technology, expertise and management with Gamesys chief executive Lee Fenton heading the combined group.

Gamesys's board has told Bally's it is minded to recommend the cash offer to shareholders subject to agreeing on terms and conditions and reciprocal due diligence. Fenton, chief operating officer Robeson Reeves and three founding investors, holding a total of 30.5% of the company, will support the deal if it is confirmed.

Soo Kim, chairman of Bally's, said: "We believe that this combination would mark a transformational step in our journey to become a leading integrated, omni-channel gaming company. We think that Gamesys's 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."

Gamesys shares jumped 18% to £19.39.6p, suggesting some investors think a counter-bid could emerge with US gambling companies scrambling to acquire online gaming technology and knowhow.

Qualifying Gamesys shareholders will be able to take all or part of their payment in shares at a value of 0.343 new Bally's share for each Gamesys share, valuing Gamesys shares at £16.55 based on Bally's closing price on Tuesday. The Gamesys executives and founders have said they would take this option instead of cash to gain from potential value creation from the combination.