European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

William Hill - Caesars (Almost) Done Deal, Trading Above Terms

Event-Driven

On 24 March, <a href="https://www.smartkarma.com/entities/bally-s-corp" target="_blank" data-smartkarma-citation="entities:32231:1" rel="noopener">Bally's Corporation (BALY US)</a> reached an <a href="https://www.gamesysgroup.com/media/1786/rule-24-announcement-dated-24-march-2021.pdf" target="_blank" rel="noopener">agreement in principle</a> to acquire <a href="https://www.smartkarma.com/entities/gamesys-group-plc" target="_blank" data-smartkarma-citation="entities:23997:1" rel="noopener">Gamesys Group (GYS LN)</a> for c. £2 bn implemented by a scheme of arrangement.
<ul>
<li>Put up or shut up deadline is 21 April.</li>
</ul>
Consideration is 1850p per share, in cash, for an implied equity value of £2,022 mn and an implied EV of £2,342 mn.
<ul>
<li>
This represents 2.9x EV/ 21e revenue, 10.4x EV/21e EBITDA and 11.8x P/21e E.
</li>
</ul>
There is also a share alternative (new shares) in lieu of part or all of the cash consideration: 0.343 BALY US x 1 GYS LN. Gamesys' main shareholders intend to take it. So Bally's will only fork out c. £1,527 mn, financed first via bridge facility then equity raise (Bally's is firmly in junk territory, rated B stable by S&amp;P).
Bally’s is interested in Gamesys to grow in online gambling and sports betting. Bally's has recently been on an acquisition run. This friendly deal would be a transformational acquisition for Bally's and both companies are eyeing US online gambling and sports betting (look at Caesars' share price run since it announced the acquisition of William Hill). Putting together Bally's brand and bricks and mortar assets together with the online Gamesys platform seems a good combination. When news of the deal broke, Bally's shares gained 14% in midday trading.
Bally's prospective offer is less than the 16.3x EV/Fwd EBITDA in the case of Caesar's bid for William Hill and 14.0x EV/Fwd EBITDA in Entain's raised offer for Enlabs.
On this basis, the offer from Bally's does not look particularly generous, and Gamesys closed on 25 March 5.4% above the prospective offer. Recommendation is long Gamesys, TP 2060p (median implied valuation on an EV/Fwd EBITDA across comparable companies).

On 24 March, Bally's Corporation (BALY US) reached an agreement in principle to acquire Gamesys Group (GYS LN) for c. £2 bn implemented by a scheme of arrangement.

Put up or shut up deadline is 21 April.

Consideration is 1850p per share, in cash, for an implied equity value of £2,022 mn and an implied EV of £2,342 mn.


This represents 2.9x EV/ 21e revenue, 10.4x EV/21e EBITDA and 11.8x P/21e E.


There is also a share alternative (new shares) in lieu of part or all of the cash consideration: 0.343 BALY US x 1 GYS LN. Gamesys' main shareholders intend to take it. So Bally's will only fork out c. £1,527 mn, financed first via bridge facility then equity raise (Bally's is firmly in junk territory, rated B stable by S&amp;P).
Bally’s is interested in Gamesys to grow in online gambling and sports betting. Bally's has recently been on an acquisition run. This friendly deal would be a transformational acquisition for Bally's and both companies are eyeing US online gambling and sports betting (look at Caesars' share price run since it announced the acquisition of William Hill). Putting together Bally's brand and bricks and mortar assets together with the online Gamesys platform seems a good combination. When news of the deal broke, Bally's shares gained 14% in midday trading.
Bally's prospective offer is less than the 16.3x EV/Fwd EBITDA in the case of Caesar's bid for William Hill and 14.0x EV/Fwd EBITDA in Entain's raised offer for Enlabs.
On this basis, the offer from Bally's does not look particularly generous, and Gamesys closed on 25 March 5.4% above the prospective offer. Recommendation is long Gamesys, TP 2060p (median implied valuation on an EV/Fwd EBITDA across comparable companies).

Bally's - Gamesys: Betting on US Online Gambling