DAVY VIEW

Given the strategic value of Gamesys’ product, technology and expertise, it is not surprising to us that a US-focused operator has looked to acquire the group. Bally’s has been active in recent months, assembling a collection of assets to address the ever-growing US online gambling opportunity. It appears to be correctly prioritising a proprietary product offering. Our initial sense is that the bid undervalues the medium-term prospects of the Gamesys business. A cash offer of £18.50 per share values the business at just 8.4x and 10.8x FY 2022 EV/EBITDA and FY 2022 P/E respectively (the Bally’s share price would have to reach $73.90 for the offered share alternative to equal the potential cash offer), before its future stand-alone US prospects plus control premium are considered.