Mergers-Acquisitions – Page 2 – OPINIAO-PUBLICA24-7

$2.7B Kindred Group Takeover by French Lottery Giant FDJ Approved — With Caveat

French antitrust regulators have approved the proposed $2.7 billion acquisition of Stockholm-listed online gambling giant the Kindred Group by Française des Jeux (FDJ), France’s lottery monopoly.

FDJ, Kindred, l’Autorité de la Concurrence — FDJ will likely acquire Kindred to create a “European gaming champion” but it must keep its monopoly business completely separate from the new brands. (Image: FDJ)

However, regulator l’Autorité de la Concurrence (the Competition Authority) insisted there must be a clear separation between FDJ’s commercial activities and its monopolistic business. That means FDJ, a former state-owned corporation, won’t be permitted to cross-sell Kindred’s products to its lottery and sports betting customers.

Moreover, it must not “share a common root or logo with the FDJ or Parions Sport Point de Vente brands, or any other brand under which FDJ markets its monopoly games in France,” l’Autorité de la Concurrence said. Players will have to sign up separately for accounts with FDJ and Kindred brands.

Failure to do so would give FDJ an unfair advantage over rival commercial operators, the regulator concluded.

Monopoly Money

Kindred, formerly Unibet Group, owns some of Europe’s best-known online casino and sports betting brands, including Unibet and 32Red.

FDJ, the largest gambling operator in France, was privatized in 2018 when the French government sold off 50% of its ownership. In November 2023, the company acquired Ireland’s national lottery operator, Premier Lotteries Ireland, making it the second-largest lottery operator in Europe and the fourth-largest globally.

In October last year, FDJ completed its acquisition of online horserace betting site ZEturf, the only segment of the gambling market it had not yet entered. ZEturf is also subject to separation from the company’s monopolistic brands.

ZEturf’s main competitor is, ironically, France’s retail horse race betting monopoly Pari-Mutuel Urbain (PMU). PMU was fined €900K by l’Autorité de la Concurrence in 2020 for failing to separate its land-based and online customer bases.

That followed a complaint by ZEturf that PMU’s co-mingling of the two channels helped it gain an unfair advantage over other operators offering horse racing pools.

‘Gaming Champion’

Following news of the Kindred takeover bid in January, FDJ Chair Stéphane Pallez said the deal would create a “European gaming champion.”

In a somewhat scathing note, Regulus Partners suggested Kindred’s real attraction was that “it allows excess cash flow generated from a privatized state monopoly to be pumped into a ready-made competitive platform which the sclerotic, statist FDJ failed organically to create.”

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Standard General Bally’s Acquisition Unlikely to Face Antitrust Threats

Standard General’s proposed $18.25 per share takeover of Bally’s (NYSE: BALY) appears unlikely to face antitrust scrutiny from federal regulators because the related waiting period on that matter is set to expire at midnight Monday.

Citing two unidentified sources close to the matter, CFTN reported Monday that the Hart-Scott-Rodino (HSR) Act guidelines pertaining to the deal will expire Monday night, with no need for Standard General to file a second request with federal regulators.

Under the Hart-Scott-Rodino (HSR) Act, parties to certain large mergers and acquisitions must file premerger notification and wait for government review. The parties may not close their deal until the waiting period outlined in the HSR Act has passed, or the government has granted early termination of the waiting period,” according to the Federal Trade Commission (FTC).

Standard General — the hedge fund that’s the largest investor in Bally’s — floated a $15 per share takeover offer in March. That was upped to $18.25 a share, which the regional casino operator accepted in July.

Standard General Bally’s Buy Not Big Enough to Draw FTC Concern

The proposed deal assigns an enterprise value of $4.6 billion to Bally’s and while that isn’t a small amount of money, it’s not the price point at which the FTC would consider making the buyer make adjustments to the initial deal structure.

Rumors that Standard General is passing HSR mandates with aplomb arrived as there’s mounting concern in the business community that under Chairwoman Lina Khan, the FTC has taken too hard a line against industry, including moves to stifle some large-scale mergers and acquisitions.

For example, the FTC sued to block the $24.6 billion merger of Albertsons and Kroger — the largest deal on record in the grocery store industry — because it’s anticompetitive. Some states have taken up that mantle, too, and have launched their own antitrust investigations into the merger.

Some Democrat donors have reportedly encouraged Vice President Kamala Harris to fire Khan should the former win the presidential election in November. The Harris campaign hasn’t publicly said if such a move is on the table.

Next Steps for Standard General

With federal antitrust concerns apparently not an issue, the next step for Standard General is dealing with regulators in the states in which Bally’s operates land-based casinos. Those are Colorado, Delaware, Illinois, Indiana, Louisiana, Mississippi, Nevada, New Jersey, and the gaming company’s home state of Rhode Island.

Due to Standard General being a hedge fund and not a direct competitor to Bally’s, significant job loss or venue closures appear unlikely to result from the acquisition, which could be the liking of state gaming regulators. Likewise, it appears unlikely that a spate of asset sales will be required as has been the case with larger gaming industry mergers.

Standard General is aiming to have the Bally’s acquisition wrapped up in the first half of 2025.

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Flutter Deal for Playtech Consumer Biz Reportedly Imminent

Flutter Entertainment (NYSE: FLUT) could reportedly reach a $2.62 billion deal to acquire Playtech’s (LSE: PTEC) Snaitech unit as soon as this week.

Flutter FanDuel — The Flutter logo at a corporate office. The company is reportedly close to acquiring Playtech’s consumer business for $2.6 billion. (Image: *The Independent*)

Shares of the prospective seller posted a double-digit gain in London trading on Monday after media reports surfaced indicating the two companies could reach an agreement in the coming days. Should that price be what Flutter offers, it would represent the entirety of Playtech’s market capitalization.

Speculation regarding Flutter’s interest in Snaitech began last month with Playtech ultimately confirming it was in talks with the Paddy Power owner.

Snaitech is one of the largest gaming companies in Italy and should Playtech shed that entity, the seller would have no consumer-facing operations, allowing it to focus on its business-to-business technology offerings. Playtech’s Monday surge was aided by news that the company reached an agreement with Mexican gaming firm Caliente regarding a long-standing argument over payments purportedly owed to Playtech. It’s also possible that if Playtech sells Snaitech, bidders could emerge for the former’s tech business.

The sale of Snaitech, will leave Playtech as a business-to-business provider of software, and, according to analysts, is likely to result in a formal takeover bid in the medium term,” reported Mark Kleinman for Sky News.

Last month, Playtech granted Flutter a period of exclusivity to perform due diligence on Snaitech, indicating the seller is not yet fielding offers from other suitors.

Snaitech Buy Keeps with Flutter Tradition

Should it reach a deal for Snaitech, the purchase would extend Flutter’s tradition of deal-making that’s allowed the operator to bolster its footprint in Europe, including in Italy where it’s already one of the largest gaming operators.

Two years ago, Flutter paid $2.2 billion for Italian lottery giant Sisal. Before that acquisition, the Dublin-based company was operational in Italy via its PokerStars and Betfair units, which have some of the largest market share in that country.

Italy is an attractive market for a company for multiple reasons. It’s the third-largest economy in the Eurozone and is Europe’s largest regulated gaming market outside of the UK, meaning a presence there diversifies Flutter’s revenue stream while reducing reliance on the UK.

Although it’s already a large market within the European wagering scene, Italy is rapidly growing thanks to the evolution of iGaming, a sector in which Snaitech has some leverage. Snaitech also operates in Austria and Germany, but is a smaller player in those countries.

Flutter’s Been Acquisitive of Late

Snaitech isn’t the only potential acquisition Flutter is working on. Last week, the company said it’s spending $350 million in cash to buy a 56% stake in Brazil’s NSX Group, which controls the popular Betnacional brand in that country.

Under the terms of that agreement, Flutter has the right to increase its interest in NSX five and 10 years after the initial deal is finalized. That’s expected to happen by the second quarter of 2025.

Flutter is the parent of FanDuel, the largest online sportsbook operator in the US.

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Flutter Pays $350M for Majority Stake in Brazil’s NSX Group

Flutter Entertainment (NYSE: FLUT) said it acquired a 56% stake in Brazil’s NSX Group for $350 million in cash to bolster its footprint in that country.

The Brazilian flag flying against a background of the Christ the Redeemer statue — The Brazilian flag. Flutter is paying $350 million for 56% of NSX to expand in that country. (Image: iStock)

NSX operates the Betnacional brand. Including Betnacional, NSX is the fourth-largest iGaming and online sportsbook company in Brazil. Importantly to Flutter, the target is already profitable. Flutter said NSX is expected to generate 2024 revenue of $256 million on adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $34 million.

Dublin-based Flutter said it will combine its 56% interest in NSX with its Betfair business in Brazil. Under the terms of the agreement, Flutter and NSX have “reciprocal put/call arrangements” by which Flutter can increase its interest in the Brazilian gaming company five and 10 years after completion of the original purchase.

The $350 million transaction, which was announced last Friday, is scheduled to close by the second quarter of 2025.

NSX Buy Could Be Smart Move by Flutter

Flutter taking a stake in NSX could prove to be a prescient move because Brazil is slated to fully regulate its iGaming and online sports betting markets at some point next year.

That’s expected to open the floodgates for international operators to bid for licenses in the country. Flutter has an advantage because it’s already established in Brazil, but partnering with a local company like NSX could be viewed favorably by regulators and it’s a move some rivals have signaled they’ll employ as well.

For gaming companies, the allure of Brazil is undeniable. The country is Latin America’s largest economy and is home to more than 200 million people. Data confirm it’s also a rapidly growing betting market, adding to the attraction for international gaming companies.

“Strong demand for sports betting and iGaming products with compound annual gross gaming revenue (GGR) growth in the unregulated market of 38% since 2018, to almost $3 billion in 2023,” according to a statement issued by Flutter.

Brazil’s Booming Gaming Market

In the eyes of many US investors, Flutter is viewed as the parent of FanDuel — the largest online sportsbook operator in this country – and while that’s accurate, the company has a massive international footprint that includes exposure to Australia, Europe, and Latin America.

The acquisition of the NSX stake is the latest in a series of shrewd buys by Flutter that have enabled the operator to add market share in countries around the world. Flutter pointed out that NSX entered the Brazilian market in 2021, and since then, has amassed a 12% sports betting share and a 9% overall share in internet gaming. The Irish company added that Betfair Brazil could deliver 2024 sales of $70 million.

“Flutter Brazil will be exceptionally well positioned to take full advantage of the significant growth opportunity in the newly regulating Brazilian market,” concluded Flutter in the statement. “In line with our successful strategy in other newly regulated markets such as the US, we expect to drive market share growth and embed future profitability through disciplined customer investment. This is expected to result in a Flutter Brazil adjusted EBITDA loss of approximately $90 million to $100 million in 2025.”

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Fox Proceeding with Plans to Take FanDuel Stake at $2.2B Discount

Fox Corp. (NASDAQ: FOX) could be preparing to take an 18.6% stake in Flutter Entertainment’s (NYSE: FLUT) FanDuel, and the media giant could do so at a significant discount to the sportsbook operator’s market value.

Fox Flutter — Fox Corp. CEO Lachlan Murdoch says the company is preparing to take an 18.6% stake in FanDuel. (Image: *CNN*)

At the Goldman Sachs Communacopia and Technology Conference, Fox CEO Lachlan Murdoch said the media company is proceeding with plans to take an 18.6% interest in FanDuel, the rights to which were acquired in 2020 when Flutter doled out $12.2 billion for The Stars Group (TSG). Fox sold Sky Bet to TSG in 2018 for $4.7 billion, taking an equity stake in the buyer.

Murdoch told attendees at the conference that Fox values FanDuel at $35 billion, meaning 18.6% is worth $6.5 billion. Assuming he’s correct and FanDuel is worth $35 billion, that implies the gaming company is worth $17.22 billion more than DraftKings (NASDAQ: DKNG), its most direct competitor. At the close of US markets on Wednesday, DraftKings sported a market capitalization of $17.78 billion.

Fox Won’t Leave $2 Billion on the Table, Says Murdoch

That $6.5 billion figure is well in excess of the $4.3 billion Fox previously estimated it would need to pay to exercise its rights to acquire 18.6% of FanDuel. To buy that portion of FanDuel, Fox must be a licensed sportsbook operator in the states in which FanDuel does business. Murdoch mentioned at the Goldman Sachs conference that the company is working to address that issue.

We’re not going to leave $2 billion on the table,” he said.

It’s clear FanDuel has appreciated in value. Following a legal spat in 2022 between Flutter and Fox, the latter agreed to buy that 18.6% of FanDuel for $3.72 billion with a 5% annual escalator, meaning that for each year the option wasn’t exercised, the price would go up 5%.

“FOX has a 10-year call option that expires in December 2030 to acquire 18.6% of FanDuel for $3.72 billion, with a 5% annual escalator,” according to a November 2022 statement issued by the media firm. “FOX has no obligation to commit capital towards this opportunity unless and until it exercises the option.”

Murdoch said Fox has already initiated the process of procuring state gaming permits.

“We’ve begun the process with state regulators,” Murdoch said. “To fully monetize the option, we need to be licensed as a gaming operator, even with only with only 18.6% and so we’ve started that process with state regulators to begin the gaming licensing approvals.”

Where’s Fox Going to Come up with $4.3 Billion?

Murdoch didn’t get into specifics of how Fox would come up with the $4.3 billion needed to activate its FanDuel stake. Coincidentally, the media entity had $4.31 billion in cash and cash equivalents at the end of fiscal 2024.

Murdoch told attendees at the Goldman conference that Fox would entertain mergers and acquisitions — possibly multiple deals — to bolster its news and sports divisions. Such transactions would require capital.

He didn’t mention the possibility of selling debt to fund acquisitions or the purchase of the FanDuel interest.

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Wynn Rumors, Including Steve, Hover Around Celtics Sale

The defending NBA champion Boston Celtics are for sale and purported bidders could include Wynn Resorts (NASDAQ: WYNN) and Steve Wynn, the founder of the gaming company.

Jayson Tatum Boston Celtics championship odds midseason NBA 2023 warriors nets bucks grizzlies nuggets 76ers — Boston Celtics star Jayson Tatum celebrates a play. There’s unfounded speculation that Wynn Resorts or Steve Wynn could be interested in buying the team. (Image: Getty)

On a recent edition of “The Greg Hill Show,” Boston sports talk radio host Courtney Cox said there are three finalists who could acquire the Celtics: Amazon founder Jeff Bezos, Boston Red Sox President Sam Kennedy, and Encore Boston Harbor. Located in Everett, Mass., Encore Boston Harbor is Wynn’s lone US casino hotel outside of Las Vegas. The property is the holder of the first sportsbook license in state history.

Kennedy’s potential involvement implies it would be Fenway Sports Group, which owns the Red Sox and the NHL’s Pittsburgh Penguins, among other sports interests, that makes a bid.

Bezos being interested in the Celtics isn’t surprising as he’s long coveted a professional sports franchise. Last year, he was among the bidders for the NFL’s Washington Commanders, but the team was ultimately sold to another group.

Wynn Resorts Buying Celtics Seems Iffy

The unidentified source cited by Cox isn’t from Boston and Wynn hasn’t commented on any interest in buying the Celtics or any other professional team.

Financially, buying the historic NBA team could be burdensome to Wynn, particularly at a time when the operator is building what could be the first casino resort in the United Arab Emirates (UAE) and is pursuing a gaming license in the New York City area. The Celtics are worth an estimated $4.7 billion, making the team the fourth-most valuable in the NBA. That’s more than half of Wynn’s current market capitalization of $8.29 billion.

Speculation that the gaming company could be mulling a bid for the team may be attributable to the operator’s hopes of expanding Encore Boston Harbor and the surrounding area. There’s been chatter that such an effort, if approved, could include a new arena for the Celtics and Boston Bruins. There’s also been scuttlebutt that the basketball team could relocate its offices to Everett.

As for the NBA allowing an owner with gaming interests, that’s not an issue. Golden Nugget boss Tilman Fertitta owns the Houston Rockets and Dr. Miriam Adelson and Patrick Adelson recently acquired majority control of the Dallas Mavericks. Adelson is the largest Las Vegas Sands (NYSE: LVS) shareholder, and Dumont is president and chief operating officer of that gaming company.

Steve Wynn an Unlikely Bidder

Born in Connecticut, Steve Wynn is a native New Englander and could well be a Celtics fan, but for now, his possible involvement in acquiring the Celtics appears to be mere speculation.

He’s 82 years old and his net worth of $3.7 billion implies he’d have to take on significant debt to meet the asking price for the Celtics, which is expected to easily set an NBA record. Wynn also no longer has ties to the gaming company bearing his surname.

Assuming the Celtics’ sale price were to approach $5 billion, that might be too rich for Wynn’s blood, but it would be easily affordable for Bezos. One of the richest people in the world, Bezos is worth an estimated $190.4 billion.

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Kambi Refutes Rumor of Potential Takeover by Genius Sports

Kambi Group Plc (OTC: KMBIF), a provider of technology services to sportsbook operators, denied that it’s engaged in takeover discussions with Genius Sports (NYSE: GENI).

Kambi takeover — A Kambi booth at an industry convention. The company denied it’s in takeover talks with Genius Sports. (Image: Kambi)

Speculation recently surfaced that Genius, a data provider to sportsbooks, was mulling a takeover of Sweden-based Kambi, but Anders Ström, chairman of the Kambi board of directors, said no such conversations have taken place.

While Kambi tends not to comment on rumour and speculation, I can confirm that Kambi is not engaged in any such discussions,” he said in a statement.

With its shares up 15.35% year to date, Genius has the currency with which to hunt for deals. It has a market capitalization of $1.5 billion, which is well above Kambi’s market value of $370.1 million.

Kambi Takeover Rumors Getting Old

Rumors about Kambi being a target aren’t new. In fact, they date back to at least the second quarter of 2023, and the purveyors of the chatter have some factors to hang their hats on.

In 2022, the Stockholm-listed company did away with a poison pill provision. Companies adopt poison pills in attempts to fend off unsolicited acquisition offers, essentially diluting the aspiring buyer by selling stock to other investors at below-market prices. With that provision gone, Kambi is an easier target for a buyer.

Furthering the speculation is the fact that Kambi recently pulled its longer-ranging financial targets, in part citing regulatory issues in Brazil. That prompted the resignation of then-CEO Kristian Nylén. High-level executive departures often stoke takeover talk.

Additionally, more gaming companies are looking to bring sports wagering technology in-house, which could further the allure of Kambi as a takeover candidate. The company’s North American clients include Bally’s, Churchill Downs, Penn Entertainment, and Rush Street Interactive, among others. Kambi also works with gaming companies throughout Australia, Europe, and Latin America. The corporation recently extended its partnership with Rush Street.

Genius Sports Denies Rumor, Too

Genius Sports also denied the scuttlebutt.

As policy, we do not comment on unfounded and ill-informed rumors. To prevent any further speculation, we can confirm that we are not involved in any discussions of this nature with Kambi,” said CEO Mark Locke in a statement.

While Genius might not be interested in Kambi, there could be an ample number of other potential suitors should the firm put itself up for sale. After the company adopted the poison pill provision in 2022, Alinea Capital Management, a Norwegian hedge fund, said there could be as many as six US-based companies interested in buying Kambi.

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Full House Resorts Sells Fallon, Nev. Casino for $9.2 Million

Full House Resorts (NASDAQ: FLL) said Tuesday it’s selling Stockman’s Casino in Fallon, Nev. to Clarity Game LLC for $9.2 million.

The deal includes the land, building, and select other operating assets. It’s a two-pronged deal in which the buyer will pay $7 million for the real estate assets and $2 million for the operating rights. The property part of the transaction is expected to close later this month. After that, Full House will pay monthly rent of $50K to Clarity until the sale of the operating rights is finalized. When that part of the deal is completed, all operating responsibilities will be transferred to Clarity.

Stockman’s Casino has more than 10K square feet of gaming space and two restaurants. It’s one of three casinos in Fallon, a town of about 9,300 in Churchill County. The other two are the Bonanza Casino and the Fallon Nugget.

Sale Part of Full House Transition

The sale of Stockman’s Casino is part of Full House Resorts’ transition — one that’s seeing the regional gaming operator focus on newer, glitzier venues.

As we have continued to grow in size, we find it prudent to focus on our larger properties in our portfolio, including our newly-opened Chamonix and American Place casinos. We are proud of our transformation of Stockman’s Casino over the years,” said Full House CEO Daniel Lee in a statement.

Chamonix is the operator’s newest property in Cripple Creek, Colo. It opened last December and is widely viewed as the most upscale gaming venue in that town. American Place refers to the Full House venue in Waukegan, Ill., where the operator currently runs a temporary version of the casino while it works through some legal challenges brought by rival bidders.

Analysts believe that alone, either the permanent version of American Place or Chamonix will gross more than the previously existing Full House portfolio combined, underscoring why the operator would indulge in a small sale such as the divestment of Stockman’s.

Including American Place, Chamonix, and Stockman’s, Full House runs seven gaming venues. The others are Bronco Billy’s in Cripple Creek, Colo., the Silver Slipper Casino and Hotel in Hancock County, Miss., Rising Star Casino Resort in Rising Sun, Ind., and the Grand Lodge Casino in Lake Tahoe, Nev.

Clarity, Full House Neighbors in Cripple Creek

Before the Stockman’s sale announcement, Clarity Game and Full House were neighbors and rivals in Cripple Creek. Last December, Michael Gaughan and a group of partners formed Rocky Mountain Gaming to acquire two casinos in the Colorado town.

Gaughn, who also owns the South Point Las Vegas, and his Rocky Mountain Gaming partners are behind privately held Clarity Game LLC.

Gaughn also owns the operating rights for the more than 1,400 gaming machines located inside Harry Reid International Airport.

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VEGAS MYTHS BUSTED: Disney Buying Excalibur from MGM

At Disney theme parks, the Excalibur is a sword that visitors can attempt to pull out of a stone. On social media, the Excalibur’s purchase by Disney is a fantasy that has been pulled out of someone’s ass.

No matter how hard you wish upon a star, this dream will never come true. (Image: TikTok/las_vegas-vibes)

The rumor was started by a clicktbait video shared on April 6 by a TikTok account called las_vegas_vibes.

“Plans for new Disney themed Hotel and Casino in Las Vegas!!” the captions announced, complete with “leaked concept artwork” that bore the obvious stamp of AI. The post, which received 98K likes, claimed the $2 billion project was “set to be completed by 2030.”

The Lyin’ King

After being bounced around various accounts on X/Twitter, the ball was then picked up by a popular Disney fan blog on July 27.

“Years ago, The Walt Disney Company heading to Las Vegas would have been a non-starter,” Inside the Magic’s Rick Lye wrote. “Gambling goes against everything that Walt Disney stood for. But that was then, and this is now.”

The only evidence offered by Mr. Lye’s story, however, is that Disney competitor Universal is opening a year-round horror experience in a 20-acre expansion of AREA15 next year, so Disney should want to include Las Vegas in its plans to stay competitive.

Also, in a stretch undertaken to show how zip-a-dee-doo-dah Disney has become with gambling, Mr. Lye cited the $1.5 billion deal that PENN Entertainment signed last October with Disney’s ESPN to use the “ESPN Bet” trademark for its new sports betting company.

The Excalibur is pictured shortly before being opened in June 1990 by Circus Circus Enterprises. In 2005, it was purchased by its current owner, MGM Resorts. (Image: vintagelasvegas.com)

The Truth

While there have been rumblings in recent years that MGM is looking to divest itself of Excalibur and Luxor, the casino giant’s Strip properties catering to more budget-conscious travelers, there is not even a shred of a shred of evidence that the Mouse House has ever considered purchasing a casino — much less the Excalibur just because its exterior would require minimal adornment to fit the Disney brand.

Casinos do not fit the Disney brand.

That’s why Disney operates one of the world’s top-ranked cruise lines without them. (On Aug. 10, it announced that it will add five more casino-free ships to its fleet, bringing its total size to 13 by 2031.)

As complete and utter fabrications go, this one even lacks originality. Ever since Excalibur opened in June 1990, nearly everyone viewing the property for the first time has been reminded of a specific Disney landmark.

“The $294 million Excalibur is a combination hotel and theme park,” wrote Millie Ball of the Muskegon Chronicle on July 22, 1990. “It’s an eye-popper for sure, a fanciful place with a hodge-podge of Cinderella castle turrets set between two 28-story towers of 4,032 rooms, and a King Arthur theme in every inch.”

Finally, it would not be irresponsible journalism to point out that Inside the Magic averages 30 million pageviews per month despite, or more likely because of, its imagineering of the truth.

Snopes.com cites it for its false recent claims that Disney is ending the Disney+ streaming service, that it suspended Snow White from its theme parks, and, most blasphemously, that it retired Mickey Mouse.

And this subreddit was created just to keep tabs on all the clickbait stories that Inside the Magic has published since its founder, Ricky Brigante, sold it in 2018.

Look for “Vegas Myths Busted” every Monday on Casino.org. Click here to read previously busted Vegas myths. Got a suggestion for a Vegas myth that needs busting? Email corey@casino.org.

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Deutsche Bank Running $4.3B Funding Deal for Apollo Everi/IGT Buy

German banking giant Deutsche Bank AG is said to be running a $4.325 billion bond/loan deal that will, in part, help finance Apollo Global Management’s (NYSE: APO) recently announced acquisition of Everi (NYSE: EVRI) and International Game Technology’s (NYSE: IGT) global gaming and PlayDigital units.

Everi stock — A slide from an Everi Holdings investor presentation. Deutsche Bank is rumored to be leading financing for Apollo’s takeover of Everi and two IGT units. (Image: *Seeking Alpha*)

Unidentified sources with knowledge of the matter told Bloomberg that as of yet, the size of the bond and leverage loan aren’t known. Last month, Apollo surprised investors when it announced a $6.3 billion offer for Everi and the two IGT businesses. In February, IGT and Everi announced a $6.2 billion deal that would have resulted in the slot machine manufacturer merging with the pair of IGT units.

Under the terms of the Apollo proposition, the private equity firm will pay $4.05 billion in gross proceeds to IGT and $14.25 a share to Everi investors.

Prior to Apollo emerging as a suitor for those entities, IGT had struck an agreement with Deutsche Bank and Macquarie Capital for $3.7 billion in financing to acquire Everi and combine the Las Vegas-based gaming device maker with its global gaming and digital operations.

Timeline for Deutsche Bank Funding for Apollo

Deutsche Bank and Macquarie, which is also involved in the financing effort, have some time with which to orchestrate bond and leveraged loan sales for the Apollo financing because when the private equity firm announced its plans for the acquisition, it said it expected the transaction to close in September 2025.

The banks have until then to launch the high-yield bond and leveraged loans, according to Bloomberg. High-yield corporate debt, also known as junk bonds, are those bonds that don’t carry investment-grade ratings. As a result, issuers must sell that debt with higher interest rates to compensate investors for increased levels of risk.

Leveraged loans are typically extended to junk-rated firms and, as a result, those loans also carry interest rates to compensate lenders for the added risk. One of the advantages of leveraged loans is that they are backed by floating rate instruments, meaning they’re often less sensitive to changes in interest rates than are fixed-rate bonds.

These instruments are frequently used to extend credit to buyers in mergers and acquisitions and can secured by assets including property, equipment, and intellectual property.

Speaking of Interest Rates …

It’s possible that Deutsche Bank and Macquarie are waiting on the Federal Reserve to lower interest rates before actively marketing the junk bond and leveraged deals on behalf of Apollo. It’s widely expected the central bank will do that next month, perhaps by as much as 50 basis points.

That would likely result in lower financing costs for high-yield issuers, though the average interest rate on highly rated junk debt has steadily trended lower over the past 10 months.

“US High Yield B Effective Yield is at 6.63%, compared to 6.62% the previous market day and 8.53% last year. This is lower than the long-term average of 8.48%,” according to YCharts.

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