US – Bally’s agrees to sell real property assets of two Rhode Island properties to Gaming And Leisure Properties for $1bnBy Phil - 29 June 2022
Bally’s Corporation (BALY) has announced that it has entered into a binding term sheet with GLP Capital, the operating partnership of Gaming and Leisure Properties, to acquire the real property assets of Bally’s two Rhode Island casino properties – Bally’s Twin River Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel.
Pursuant to the terms of the transaction, Bally’s will immediately lease back both properties and continue to own, control, and manage all the gaming operations of the facilities on an uninterrupted basis. Total consideration for the acquisition is $1bn.
Bobby Lavan, Chief Financial Officer of Bally’s, said: “Bally’s is excited to enter into this transaction with GLPI, further strengthening our growing relationship. The transaction will provide the Company with significant, long-term liquidity, ensuring that Bally’s is best positioned to continue executing its capital and strategic plan, as well as to capitalize on future opportunities presented in the market.”
Both properties are expected to be added to the existing Bally’s Master Lease between GLPI and Bally’s, with incremental rent of $76.3m. The Master Lease has an initial term of 15 years (with 14 years remaining) followed by four five-year renewals at the tenant’s option. Normalized rent coverage on the Master Lease – which includes Bally’s Dover Casino Resort, Bally’s Evansville Casino & Hotel, Bally’s Quad Cities Casino & Hotel and Bally’s Black Hawk Casinos – is expected to be 2.0x in the first calendar year following the completion of the acquisition of the real property assets of Bally’s Rhode Island properties.
In connection with GLP’s commitment to consummate the Bally’s acquisitions, it also agreed to pre-fund, at Bally’s election, a deposit of up to $200m, which will be credited or repaid to GLP at the earlier of closing and December 31, 2023. In addition, Bally’s will pay a $9m transaction fee at closing.
If all third-party consents and approvals for the acquisition of Lincoln are not timely received, then GLP will instead acquire the real property assets of the Hard Rock Hotel & Casino Biloxi in Mississippi along with Tiverton for total consideration of $635 million and a combined annual rent for Tiverton and Biloxi of $48.5m. In that event, GLP will also have the option, subject to receipt of required consents, to acquire the real property assets of Lincoln prior to December 31, 2024 for a purchase price of $771m and additional rent of $58.8m.