DraftKings Faces Further Legal Trouble
The acquisition of Golden Nugget Online Gaming (GNOG) by DraftKings is being investigated by Juan Monteverde of Monteverde & Associates over alleged violations of securities law.
Monteverde & Associates is a New York-based mergers and acquisitions firm. Its investigation is looking into whether GNOG and its board of directors broke securities law and/or breached its fiduciary duties by failing to carry out a fair process.
Furthermore, Monteverde will be investigating whether the transaction is properly valued. According to the terms of the acquisition agreement, GNOG shareholders are set to receive 0.365 shares of DraftKings per share they own.
When the acquisition deal was announced last August, the all-stock transaction was valued at roughly $1.65 billion. Through the deal, DraftKings is hoping to combine its sports betting expertise with Golden Nugget’s online casino know-how.
The merger could be extremely lucrative for both parties. GNOG chairman and CEO Tilman Fertitta has called it an “unbeatable partnership” that “can offer value to our combined base that is unparalleled.”
However, if Monteverde’s investigation uncovers evidence of wrongdoing, it could bring the deal crashing down and lead to a class-action lawsuit.
Together with a statement on its website announcing the investigation, Monteverde also provided a form giving Golden Nugget shareholders the option to join the action.
Accompanying the form is the text, “As a named plaintiff, you acknowledge that you owned shares in Golden Nugget Online Gaming Inc prior to the recent takeover announcement and that you must maintain ownership in Golden Nugget Online Gaming Inc throughout the litigation and/or closing of the transaction.”
DraftKings is also facing legal action from Colossus Bets, which was announced just before Monteverde revealed its investigation. Colossus Bets, a London-based betting business, claims that DraftKings has consistently infringed its intellectual property rights.
More Business News
RELATED TOPICS: Business
Latest News
Most Read
Must Read
Interviews
Review this New Post
Leave a Comment
User Comments
Comments for DraftKings Faces Further Legal Trouble