Landcadia Holdings II Amends Golden Nugget Vote Requirements

Landcadia Holdings II Amends Golden Nugget Vote Requirements
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Landcadia Holdings II hopes to assure a favorable vote for its effort to acquire privately held Golden Nugget Online Gaming after amending voting requirements for stockholder voting on the matter. The vote, which was postponed Dec. 18, is rescheduled for Dec. 29.

If stockholders approve the deal, Landcadia Holdings II — a special purchase acquisition company (more commonly called a SPAC or blank-check company) — would absorb Golden Nugget Online and take that company public on the NASDAQ.

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SPAC mergers have become popular in 2020 as a less costly and more efficient way to take privately held companies to the public markets. The most noteworthy of such mergers in the online gaming world has been the transformation of DraftKings from a privately-held company to a publicly-traded one through a business combination with SPAC Diamond Eagle Acquisition Company earlier this year.

In the case of Landcadia Holdings II and Golden Nugget Online, there’s still another wrinkle — both companies are essentially controlled by Tilman Fertitta, a billionaire who leads one of the country’s largest restaurant corporations in Landry’s, owns the NBA’s Houston Rockets, and has been a TV personality.

Last week, a stockholder vote was scheduled for the Golden Nugget Online-LH II merger to move ahead. But when it was clear there was not a sufficient number of required votes, the meeting was quickly ended and rescheduled.

On Tuesday, Landcadia Holdings II announced that it has entered into an amendment “to modify the voting requirement for stockholder approval of the Business Combination.” Under the change, the proposed merger would need to receive “the affirmative vote of a majority of our outstanding shares of common stock that are voted at the special meeting, rather than a majority of the outstanding shares of Class A common stock held by disinterested stockholders,” the company said in a statement. The same would be true to approve an amended and restated certificate of incorporation of the company.

A Favorable Vote, But Low Turnout

Landcadia Holdings II pointed out in a news release that stockholders who did cast votes prior to last week’s scheduled meeting were solidly in favor of the deal noting that as of Dec. 18, “approximately 99.8% of the Class A shares held by disinterested stockholders that have been voted were voted in favor of the Business Combination, and over 90% were voted in favor of the other proposals.”

As it turned out, though, only approximately 40.5% of Class A common stock holders had voted by the time the vote was scheduled on Dec. 18. The company said it believes that the low voter turnout is “primarily the result of having a significant portion of our stockholder base comprised of retail stockholders.”

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Landcadia Holdings II also pointed out that its own stock (LCA on the NASDAQ) had enjoyed a significant price increase, presumably in anticipation of the acquisition of Golden Nugget Online. The online gaming company noted that its gross gaming revenue increased 72% in the first nine months of 2020, according to reports.

The New Jersey Casino Control Commission in late November approved Golden Nugget Atlantic City’s request to break off its Internet gaming operations from the brick-and-mortar casino and take the new company public.

Landcadia Stock Rises

As recently as late October, LCA was trading in the $11 range. On Tuesday, LCA was trading in the $23 range. Should the deal go through with Golden Nugget Online, the merged company is expected to trade as GNOG.

“The Company expects that the (voting requirement) amendment will create more certainty that the Business Combination and other proposals to be presented to its stockholders at the reconvened special meeting on December 29, 2020 will be approved since the shares of common stock held by Tilman J. Fertitta and his affiliates and Jefferies Financial Group Inc. and its affiliates have been voted in favor of each of the proposals,” LC II said in its statement.

The noon meeting on Dec. 29 will be held virtually here. The revision of the voting requirement has been filed with the U.S. Securities and Exchange Commission.

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