Shares of Gamesys surged in London on Wednesday, after the online software development and gaming company announced a possible merger with U.S. based Bally’s Corp.
Shares of the FTSE 250-
surged 17% in London, the best performer on the smaller company index, which itself was up just modestly. The FTSE 100 index
was flat and the pound
was down 0.3%.
Investors brushed aside better-than-expected U.K. inflation data, with consumer prices falling to 0.4% in February from 0.7% in January, and driven in part by falls in clothing prices. Concerns about European lockdowns and fears of a third wave of the COVID-19 pandemic for the U.K. have been weighing on markets this week.
As for the London mergers and acquisitions news, the boards of Gamesys and Bally’s Corp.
the U.S. gaming company, announced an agreement in principle to a possible tie-up.
Bally’s will offer 1,850 pence for each share of Gamesys, a 12.7% premium to its March 23 closing price. Gamesys shareholders would also have the option of receiving 0.343 new Bally’s shares in lieu of part or all of the cash consideration they would get under the deal. The companies said there is no guarantee a deal will be completed.
“We think that Gamesys’ proven technology platform alongside its highly respected and experienced management team, combined with the U.S. market access that Bally’s provides, should allow the combined group to capitalize on the significant growth opportunities in the U.S./ sports betting and online markets,” said Soo Kim, chairman of Bally’s.
Terms of the deal would see the combined group based in Rhode Island, and retain a listing on the New York Stock Exchange. The chief executive of Gamesys, Lee Fenton, would become the CEO of the combined group and two Gamesys directors would join Bally’s board.