UPDATE: Stifel Downgrades Bally Technologies As 'Competitive Bid Unlikely'

Amid last week's announcement that Scientific Games (NASDAQ: SGMS) will acquire Bally Technologies (NYSE: BYI), Stifel is downgrading Bally from Buy to Hold as the firm views the offer as fair and believes a competitive bid is "unlikely."

Stifel has also attributed the downgrade to the belief that investors would be able to earn higher time-adjusted returns by liquidating shares of Bally and reinvesting the proceeds in shares of Multimedia Games (NASDAQ: MGAM). This notion is shouldered by expectations that Scientific Games will run into road bumps that will delay the early-2015 acquisition timeline.

In addition to the downgrade of Bally, Stifel has reiterated its Buy rating on Multimedia Games as it views the company as offering the "most attractive" potential upside in the equipment supplier space.