VGW Shareholders Approve Owner's Bid to Take Control of the Sweepstakes Gaming Company
VGW Holdings, one of the leading operators in the sweepstakes gaming space, has received shareholder approval for a deal that will give founder Laurence Escalante full ownership of the company. On Friday, VGW shareholders voted in favor of selling the remaining 30% of the company to Escalante, who already owned a 70% stake. The acquisition is being executed through Ocean BidCo Limited, an unlisted special purpose vehicle backed by Escalante's family office.
LISTEN TO THIS ARTICLE:Ocean BidCo Limited will serve as the purchasing entity for the final portion of VGW's outstanding shares, effectively transferring total ownership of the company to Escalante. Approximately 85% of shareholders supported the transaction, indicating broad backing for the proposed structure and valuation. The move follows Escalante's filing of a scheme implementation deed in June aimed at consolidating full control of the company he founded.
The agreed transaction values the remaining 30% of VGW at $632 million, translating to a per-share price of $3.32. An independent valuation conducted by advisory firm Kroll Australia found the offer to be fair and reasonable, estimating the company's share value at up to $3.70.
Escalante declined to revise his offer upward, maintaining that the proposal was aligned with the company's current market value. Prior to this, Ocean BidCo had proposed a lower offer in the range of $2.26 to $2.58 per share, which was rejected by a special board committee assembled by VGW to oversee the potential sale.
Concerns had previously been raised by some shareholders regarding transparency during the negotiation process. The board responded by creating an independent committee composed of financial and legal advisors to evaluate any acquisition proposal. This committee was tasked with ensuring that all shareholder interests were considered and safeguarded throughout the process.
More Business News
Escalante Moves Quickly to Take Control
Escalante first expressed interest in acquiring full control of VGW in November 2024, initiating discussions with the board of directors. This led to the formation of the independent committee and a more formal review of his buyout plans. During the negotiation period, some shareholder concerns were met with a strong and informal reaction from Escalante in a private group chat, which drew additional scrutiny to the process.
Under the terms of the approved transaction, Ocean BidCo is expected to borrow up to $586 million from VGW itself to finance the purchase of the remaining shares. The deal structure allows current shareholders to receive cash, continue investing in VGW, or opt for a combination of both options. The transaction, while supported by the shareholders, still requires approval from the Federal Court of Australia before it becomes legally binding.
The Federal Court hearing is scheduled for August 5. If approved, the deal will be finalized and implemented by August 20, at which point shareholders will receive the agreed-upon consideration. The arrangement effectively values VGW at around $2 billion. Financial reports indicate that VGW generated $4 billion in revenue in the 12-month period ending June 30 of the previous year, reflecting a 27% year-over-year increase.
Escalante stands to significantly increase his personal wealth upon completion of the transaction. His net worth is currently estimated at approximately $3 billion, a 20% rise over the past year, according to the Financial Review's Rich List. This valuation places him as the 35th wealthiest individual in Australia.
RELATED TOPICS: Business
Latest News
Regulation
Review this New Post
Leave a Comment
User Comments
Comments for VGW Shareholders Approve Owner's Bid to Take Control of the Sweepstakes Gaming Company