Gamesys Group PLC (LON:GYS) shares have leapt higher after its board agreed key terms for a possible £2.1bn takeover by US-based Bally's Corp (NYSE:BALY).
Bally’s, which owns casinos, hotels and racetracks, has offered 1,850p in cash per Gamesys share. Shareholders would still receive their promised 28p per share of 2020 final dividend.
A share alternative has also been proposed of 0.343 new Bally's shares for each Gamesys share, which based on the last closing price of US$66.34 would value each Gamesys share at 1,655p.
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The Gamesys board said it is “minded to” recommend the cash offer, subject to agreeing other terms and conditions and the satisfactory completion of reciprocal due diligence.
Combining the two companies “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”, the pair said in a statement on Wednesday afternoon.
By this, they explained that Gamesys would be expected to benefit from Bally's fast-growing land-based and online platform in the US providing market access in key states as the nascent igaming and sports betting opportunity develops in the US.
Bally's expects to benefit from Gamesys’s technology platform, expertise and experienced management team, with Gamesys chief executive officer Lee Fenton becoming the CEO of the combined group and bringing two additional directors to join Bally's board.
Bally's CEO, George Papanier, would remain a member of the board and a senior executive running the retail casino business.
“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,” said Fenton.
“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.”
Shares in Gamesys were up 19% to 1,946p.