(Alliance News) - Gamesys Group PLC has agreed to a potential takeover from New York-listed Bally's Corp, which would value the FTSE 250 gambling software firm at GBP2.02 billion.
The 1,850 pence per share offer is a 13% premium to the company's closing price on Tuesday, gaming firm Bally's noted. Rhode Island-based Bally's owns racetracks and casinos in the US.
Gamesys shares were 17% higher at 1,920.00p each in London on Wednesday afternoon, valuing the London-based company at GBP2.10 billion. In New York, Bally's was up 3.4% in pre-market trade. It had closed down 3.8% at USD66.34 each on Tuesday, giving it a market capitalisation of USD2.05 billion, about GBP1.50 billion, making it smaller than Gamesys.
"The Gamesys board and Bally's board believe that the possible combination has a compelling strategic and financial rationale, would create long-term value for both Gamesys and Bally's and would be consistent with Bally's and Gamesys' respective long-term growth strategies," a statement on Wednesday said.
"Gamesys would benefit from Bally's fast-growing land-based and online platform in the United States, providing market access through Bally's operations in key states as the nascent iGaming and sports betting opportunity develops in the US."
The statement noted that the announcement does not constitute a firm offer for Gamesys. Bally's has until the close of play on April 21 to decide whether it plans to make a firm offer for Gamesys.
Bally's has also given Gamesys shareholders a "share alternative" option. This would see investors receive 0.343 of a Bally's share for each Gamesys share.
Gamesys Chief Executive Officer Lee Fenton said: "From our first meeting to now it has been the entrepreneurial energy of the two businesses that has brought us to the edge of creating a uniquely powerful company. Our shared passion and vision to capitalise on technology disruption to better serve our customers, wherever they may be, should make for an exciting journey for our employees, customers and shareholders alike."
Sports betting is being legalised in many US states for the first time following a Supreme Court ruling in 2018, allowing UK bookmakers and software providers alike to tap into the lucrative market there.
London-listed gambling firms have also attracted M&A attention from across the Atlantic.
Ladbrokes Coral owner Entain PLC fought off interest from US partner MGM Resorts. In September, US gambling resorts operator Caesars Entertainment Inc said it reached an agreement to acquire FTSE 250-listed William Hill PLC for GBP2.9 billion
By Eric Cunha; ericcunha@alliancenews.com
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