The deal for VGW owner Laurence Escalante to acquire full ownership of the sweepstakes casino giant was approved on Friday by the company’s shareholders.
VGW shareholders approved the sale of the remaining 30% of the company not currently owned by Escalante. The VGW founder, who owned 70% of the sweeps giant before filing a scheme implementation deed in June for the remaining ownership stake, is acquiring full control of VGW through an unlisted special purpose company created by his family office.
The special purpose company, Ocean BidCo Limited, is providing Escalante with full ownership after 85% of VGW shareholders voted in favor of the minority stake sale.
“I would like to thank all of VGW’s shareholders for their participation in the shareholder meetings today and their support of VGW,” said VGW Independent Board Committee Chairman Independent Non-Executive Director Mike Symons.
Escalante proposed a $632 million buyout for the remaining 30% of VGW and refused to submit a higher bid after the offer was deemed fair and reasonable by an independent expert. Escalante’s buyout offer was $3.32 per share with an independent expert provided by advisory solutions provider Kroll Australia valuing VGW at up to $3.70 per share.
Ocean BidCo had previously proposed acquiring VGW for between $2.26 and $2.58 per share but a VGW board committee established for the sale rejected the proposal. Negotiations also led shareholders to raise concerns about transparency throughout VGW.
Escalante responded to the concerns with a profanity-laced tirade in a private group chat.
VGW creates a special committee for the sale
Escalante first considered acquiring full ownership of VGW in November 2024 after approaching the company’s board of directors about a potential transaction. The inquiry led VGW’s board to establish an independent committee to evaluate a potential deal.
The shareholder-approved sale of the remaining 30% of VGW that Escalante doesn’t own would have Ocean BidCo borrow up to $586 million from VGW to fund the transaction.
According to documents, VGW posted $4 billion in revenue in the 12 months to June 30 last year. The results during the period for VGW were a 27% increase year-over-year.
The committee is a group of financial and legal advisors for VGW.
More work to be done for VGW
VGW stakeholders sanctioned the sale to Escalante, but the deal requires further approval.
The Federal Court of Australia must also approve the transaction and will hold a hearing on the matter on Aug. 5. If approved by the court during the hearing, the sale will become legally effective with VGW stakeholders being provided with consideration on Aug. 20.
The deed filed by VGW allows shareholders to benefit from the transaction by receiving cash, continuing their investment in VGW or both. Escalante is poised to increase his net worth if a deal is finalized for full control of VGW. According to the Financial Review’s Rich List, Escalante has a net worth of roughly $3 billion, a 20% increase year-over-year.
The figure makes him the 35th richest person in Australia. An approved VGW deal by the Federal Court of Australia would value the sweepstakes operator at roughly $2 billion.
Ongoing operational changes for VGW
The sweepstakes company is facing scrutiny across North America.
VGW shuttered operations of its online sweepstakes in New York after pulling the online offerings from Connecticut and Delaware. Earlier this week, the company announced it would stop providing its sweepstakes promotions in New Jersey due to a new law.
A5447, which awaits Gov. Phil Murphy’s signature before it can be enacted, bans sweepstakes casinos in the Garden State after passing through both legislative chambers.
The measure prohibits the operation of dual-currency systems for online gaming. VGW is also being impacted by a sweepstakes casino ban in Montana that has been signed.
