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Ahead of BYI’s earnings tonight, BYI filed an interesting 8K. Historically, adding change of control provisions to management employment contracts has been a signal.

Bally filed an 8k last night involving an amendment to CEO Dick Haddrill’s employment contract.  Among other things, the amendment provides for a cash payment of $2.5 million to Mr. Haddrill upon the company meeting certain financial objectives OR upon a change of control. 

Michelle Leder of Footnoted, our SEC filings expert and partner, will be following up with some important detail and historical implications of these types of filings.  The main takeaway, however, is that adding change of control language to management employment contracts has been a somewhat reliable signal of a company being acquired.

Mr. Haddrill successfully sold another gaming equipment supplier, Powerhouse Technologies, among other companies, so he is no stranger to getting deals done at a premium.

BYI will report earnings tonight after the close.  As we wrote about in our preview note, we think earnings will be fine but we are not making a call on the quarter.  We do like the company and fundamentals long-term and obviously, realization of the company’s true value could be expedited with a sale.