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Landcadia Investors Finally Approve GNOG Merger


Posted on: December 29, 2020, 10:38h. 

Last updated on: December 29, 2020, 10:38h.

Tilman Fertitta’s Golden Nugget Online Gaming will make its debut as a standalone publicly traded entity on Wednesday, Dec. 30, launching on the Nasdaq under the ticker “GNOG” after Landcadia Holdings II, Inc. (NASDAQ:LCA) investors voted to approve a merger between the two companies.

Landcadia GNOG
Billionaire businessman Tilman Fertitta. Investors in his Landcadia SPAC finally voted to merge with Golden Nugget Online Gaming. (Image: Houston Business Journal)

After failing to garner enough votes for the combination at a previously scheduled virtual meeting on Dec. 18, Landcadia, a special purpose acquisition company (SPAC) controlled by Fertitta and investment bank Jefferies, adjourned that conference and called a special shareholders meeting, which took place today.

Citing an investor base that’s 70 percent retail, a group that typically doesn’t pay much attention to corporate votes, the SPAC amended its purchase agreement with GNOG so that a simple majority of attendees at today’s meeting needed to vote in favor of the merger to move it forward rather than more than half of the overall shareholder count.

The strategy worked as today’s virtual meeting lasted just over six minutes with attendees voting overwhelmingly in favor of the merger. An official tally will be revealed in a regulatory filing with the Securities and Exchange Commission (SEC).

Say Hello to GNOG

Following the late June announcement that Landcadia would attempt to merge with Golden Nugget Online, providing the iGaming operator an avenue to go public, it was expected the transaction would be wrapped up in the third quarter.

However, the coronavirus pandemic got in the way, delaying the New Jersey Casino Control Commission’s (CCC) ability to weigh in on the matter. That approval, which was necessary because the Garden State is currently GNOG’s biggest market, was granted last month.

Even with the hurdles created by the pandemic and the need for a second shareholder meeting, the time from deal announcement to completion is six months, highlighting why so many companies in 2020 are opting for transactions with blank-check firms over the traditional initial public offering (IPO) process, which can take a year or more in some instances.

The merger values GNOG at $745 million, or 6.1x next year’s estimated revenue of $122 revenue. Landcadia is assuming $150 million of the target’s debt and it’s expected that when the online gaming firm debuts tomorrow, it will do so with a market capitalization of around $700 million and $80 million of cash on its balance sheet.

SPAC Fever in Gaming Industry

SPAC mania is one of 2020’s most prominent financial market themes and the gaming business is participating in the fervor.

In April, daily fantasy sports (DFS) provider and online sports book operator DraftKings (NASDAQ:DKNG) went public following a reverse merger with a blank-check entity. Earlier this month, mobile games provider Skillz Inc. (NYSE:SKLZ) debuted following a SPAC marriage.

Next year could be brisk on the blank-check/gaming deal front because of a slew of SPACs went public this year declaring interest in online gaming and sports wagering assets.



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