VGW owner Laurence Escalante will not increase his bid to acquire full ownership of the sweepstakes casino giant that could be valued at approximately $2 billion.
Escalante will not submit a higher bid for full ownership of VGW after proposing a $632 million buyout earlier this month. The proposed buyout was deemed a fair and reasonable offer by an independent expert provided by advisory solutions provider Kroll Australia.
The independent expert determined Escalante’s $3.32 per share cash offer was adequate based on its comprehensive assessment of the company’s value of up to $3.70 per share.
“We believe the scheme represents an attractive outcome for shareholders, noting this is the best and final offer from LEO and that an alternative superior takeover proposal from another person is unlikely to emerge,” said VGW Independent Director Mike Symons.
Escalante won’t change his bid as an existing VGW owner with a 70% stake in the company.
VGW filed a Scheme Implementation Deed with an unlisted special purpose company created by the family office of Escalante seeking ownership of the remaining 30%.
The special purpose company, Ocean BidCo Limited, submitted an initial non-binding proposal to acquire full control of VGW for between $2.26 and $2.58 per share.
A board committee established to evaluate the potential sale rejected the proposal. The contentions negotiations led the special purpose company to increase its bid price.
Escalante responded to concerns about VGW’s transparency during negotiations with a profanity-laced tirade in a private group chat with minority shareholders of the company.
The deed filed by VGW provides minority shareholders with several ways to benefit from a potential transaction. VGW shareholders have the opportunity to receive cash, to continue their investment in VGW or both.
VGW shareholders are expected to consider Escalante’s offer next month. A deal to transfer full ownership of the company to Escalante must be completed by Sept. 15.
VGW faces sweepstakes backlash
Escalante may acquire full ownership of VGW as it faces regulatory scrutiny nationwide.
Earlier this month, VGW shuttered operations of its online sweepstakes offerings in New York. The company has also shuttered sweeps offerings in Connecticut and Delaware.
It also recently helped establish the Social Gaming Leadership Alliance to advocate for social gaming operators. The coalition also includes ARB Interactive and Nuvei.
