Alliance's unsolicited bid seeks takeover of Bally

June 20, 1995|By New York Times News Service

Alliance Gaming Corp., a Las Vegas-based operator of gambling machines and the owner of casinos in Mississippi and Nevada, said yesterday that it had offered to acquire Bally Gaming International, the nation's second-largest slot machine maker after International Game Technology of Reno, for more than $134 million, or $12.50 a share, in cash and stock.

The unsolicited bid came two months after WMS Industries, a Chicago-based manufacturer of gambling machines and coin-operated amusement equipment, said it had agreed in principle to acquire Bally Gaming in a cash and stock deal valued at $127 million, or about $11.85 a share.

Although it has not made money in the last five years, Alliance Gaming got an important financial lift last year when Kirkland-Fort Worth Investment Partners LP, an investment group controlled by Richard Rainwater, the Texas investor, acquired what in effect is a controlling stake.

In a letter to Bally Gaming's board detailing its offer, Steven Greathouse, chairman and chief executive at Alliance, said Bankers Trust Co. and Indosuez Capital, the merchant banking arm of Banque Indosuez, had tentatively agreed to provide $150 million for the deal.

Under the terms of the offer, Alliance would also assume Bally Gaming's outstanding debt, which Mr. Greathouse put at $70 million to $75 million.

A spokesman for Bally Gaming would not comment on the offer beyond saying that the company was studying its contents. A spokesman for WMS also declined comment.

As was the case with the WMS bid, which officially expired more than a month ago, Alliance said its offer was subject to a number of contingencies, including an examination of Bally Gaming's books and the requisite regulatory approvals.

Absent a hard offer, investors reacted somewhat skeptically to the news.

Bally Gaming shares rose $1.625, to $10.50, in Nasdaq trading yesterday. WMS shares rose 75 cents, to $20.50, and Alliance's stock increased 12.5 cents, to $5.25.

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