Online gaming platforms DraftKings Inc. (Nasdaq: DKNG) and Golden Nugget Online Gaming, Inc. (Nasdaq: GNOG) announced this morning their definitive agreement that will see the latter’s acquisition for approximately US$1.56 billion in an all-stock transaction. This transaction will include DraftKings acquiring Golden Nugget’s popular gaming brand, iGaming.
Under the terms of the agreement, Golden Nugget shareholders will receive 0.365 DraftKings Class A common shares for each share held. DraftKings will form a new holding company for the announced merger, later to be renamed DraftKings Inc.
In connection with the acquisition, DraftKings also entered into a commercial agreement with Golden Nugget’s parent company Fertitta Entertainment. The transaction includes commercial deals like marketing integrations and market access across the entertainment firm’s portfolio, which include the Houston Rockets and Landry’s.
Coincidentally, Fertitta Entertainment owner Tilman Fertitta currently holds 46% equity on Golden Nugget and will receive proportionate DraftKings shares following the transaction. He will effectively gain a seat on the DraftKings board and agrees to hold on to the shares for a minimum of one year following the merger.
The transaction already got both nods from the parties’ respective boards. It is expected to close in the first quarter of 2022, subject to Golden Nugget shareholders’ approval which is expected to be obtained through written consent from Fertitta, and customary regulatory approvals.
Last week, DraftKings reported its financial results for Q2 2021, including US$297.6 million in revenue and US$305.5 million in net loss.
DraftKings last traded at US$51.59 while Golden Nugget last traded at US$12.27 on the Nasdaq.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
The Grocery Grift: Why Toronto and New York Are About to Light Taxpayer Money on Fire