Each week, CasinoBeats breaks down the numbers behind some of the industry’s most interesting stories. In our latest edition we feature an array of M&A activity that hit the headlines, including Aristocrat, DraftKings, and Penn National Gaming; Crown and Star Entertainment providing updates in Australia; and the UKGC issuing a licence suspension.
2.7
Australian-listed gaming manufacturer Aristocrat Leisure is to buy European gaming giant Playtech after making a cash offer valuing the company at £2.7bn, a 58 per cent premium on its closing price.
The Playtech board unanimously recommended that shareholders vote in favour of the deal in a year that has seen an unprecedented level of M&A activity. Aristocrat plans to fund the deal with a £864m equity raising, alongside new debt and existing cash.
Aristocrat believes the deal will provide material scale in online gaming, provide revenue growth, reach a broader range of customers and ‘operate and innovate’ in the European market through Playtech’s Snaitech B2C operation.
The offer represents a valuation multiple of 11.4x Playtech’s adjusted EBITDA for the 12 months to 30 June 2021, and Aristocrat has already made deals with major shareholders for just over 20 per cent of Playtech’s outstanding shares.
20
DraftKings said that it is looking forward to further exploring potential benefits of a $20bn takeover of Entain, after a deadline to make a definitive agreement on such a move was extended.
The gambling group confirmed that its ‘Put Up or Shut Up’ deadline must now be made by no later than 5pm on November 16, 2021, when Draftkings must either announce a firm intention to make an offer or that it does not. This deadline may be further extended with the consent of the panel on takeovers and mergers, at Entain’s request.
Matters which Entain has described as ‘fundamental’ to the value of the proposal include total value creation for Entain shareholders, including synergy shares; governance and management composition of the prospective combined entity; and deliverability of such a transaction, including antitrust and regulatory clearances.
Furthermore, the status of BetMGM, which Entain operates as a US-facing subsidiary in collaboration with MGM Resorts, has also been cited as an issue requiring further clarification.
93
Penn National Gaming has stressed excitement at “creating this powerful new entertainment flywheel,” after completing the purchase of Score Media and Gaming in an $2bn cash and stock transaction.
The agreement was initially slated for completion during the first quarter of 2022 after first being detailed in August, however, following recent approvals, including that of the Supreme Court of British Columbia, that date has been brought forward significantly.
The deal saw Score shareholders receive $17 in cash and 0.2398 shares of PNG common stock for each share, which implies a total purchase consideration of $34 per each based on a five-day volume weighted average trading price as of July 30, 2021.
Current PNG and Score shareholders will hold approximately 93 per cent and seven per cent, respectively, of the company’s outstanding shares.
2022
The Star Entertainment Group issued an update to reports of potential class action lawsuits, as the group’s Star Sydney review is updated to enable public hearings to be carried out.
This means that the review, which was first announced last month to determine if the company is suitable to keep hold of its casino licence in the state, will now be heard publicly.
The review, which is considering how effectively The Star is complying with its statutory obligations and whether it remains suitable to hold its licence, commenced after Adam Bell was appointed by the Independent Liquor & Gaming Authority.
Bell, the lead senior counsel who assisted the Bergin Inquiry into Crown Resorts, advised the ILGA that he considers it in the public’s interest to hold public hearings on matters including, but not limited, to The Star’s maintenance and administration of systems to counter money laundering and infiltration by organised crime.
The ILGA, which stated that it is “fully supportive” of Bell’s decision, expects the hearing to be held in March 2022. The publicly available report will be due to ILGA by June 30, 2022
2005
The UK Gambling Commission issued an immediate suspension of the operating licence of BGO Entertainment, as the regulator undertakes a review under section 116 of the Gambling Act 2005.
This, said the UKGC, comes amid concerns that activities may have been carried out contrary to the Act, not in accordance with conditions of their licence and that the licensee may be unsuitable to carry on the licensed activities. Failing to protect consumers was a key consideration in the suspension decision, it is added.
The suspension, which was authorised under section 118 (2) of the Act, does not prevent the operator from allowing consumers to access their accounts and withdrawing funds. BGO Entertainment operates bgo.com, m.bgo.com, powerspins.com, vegasluck.com and chilli.com.
10
The New York Gaming Commission issued a request for information that is charged with gauging interest from operator’s in developing and/or operating one of three casinos in the city region.
This is intended to inform the Commission for the purposes of determining the appropriate size and scope of development, value of the gaming facility license, and process that should be used in award consideration.
Under state law, the regulator can pursue the development of three downstate casinos in New York after a prior policy of former Governor Andrew Cuomo pushed the addition of upstate gaming venues in a bid to create jobs, as well as reduce unemployment in disadvantaged areas.
A deadline for submission of questions is set at November 10, 2021, and final submissions must be in by December 10, 2021. The Commission is obligated to prepare and distribute a report with the results of the RFI to the governor and the state legislature no later than six months after receiving such information.
2021
Crown Resorts confirmed the appointment of Steve McCann as CEO and managing director, ahead of the embattled casino operator updated stakeholders in its 2021 annual general meeting.
The recruitment of McCann, which was first detailed on May 10, 2021, became finalised following the receipt of all necessary regulatory approvals.
Following the confirmation, McCann addressed interested parties at the firm’s AGM, asserting that “we must do things differently to how they have been done in the past”.
“This is my first opportunity to address shareholders directly at a Crown annual general meeting,” McCann began.
“Leading a company like Crown comes with significant responsibility and scrutiny – never more so than now. In the nearly five months since joining Crown, I have come to understand in greater detail the challenges confronting the organisation.
“While we have a lot of hard work ahead of us, the board and management of Crown are committed to restoring the reputation of the organisation and driving an appropriate return for shareholders in a responsible manner.”