Escalante seeking 100% ownership of VGW
VGW founder and CEO Laurence Escalante, whose company operates three of the biggest online sweepstakes casinos in the world, is looking to buy out investors who own the outstanding 30% of the company to give him 100% ownership.
VGW operates Chumba Casino, Luckyland Slots and Global Poker. Those who currently own shares have the option to receive AU$5.05 per share (US$3.28) or take shares in a special purpose bid vehicle. The share price offering creates a valuation of AU$3.3 billion (US$2.14 billion) for VGW, which is trying to gain solid footing in the US as states ponder whether to regulate sweeps or make them illegal.
Louisiana moved a huge step closer to joining Montana and Nevada as states that have banned sweepstakes casinos after legislation unanimously passed in the House on Monday. Connecticut is also a governor’s signature away from outlawing sweeps after SB 1235 passed on Tuesday.
New York and New Jersey also have bills progressing through their respective statehouses and VGW reportedly has begun phasing out the sweepstakes platforms of its offerings in the Empire State.
A better price for shareholders
On its website, VGW detailed some of the process that led to the buyout offer. Lance East Office (LEO), which established the special purpose bid vehicle, approached VGW about such a transaction last November.
VGW’s board then put governance protocols and procedures in place to ensure it acted in the best interest of shareholders, which included the creation of the Independent Board Committee (IBC) and the naming of Mike Symons of Canterbury Partners as an independent non-executive director of VGW.
By January, LEO submitted a non-binding indicative proposal to acquire VGW with a cash consideration between AU$3.50 ($2.27) and $4 ($2.60) per share. The IBC rejected this offer primarily because it felt the price undervalued VGW.
The two sides then began negotiating, which led to LEO substantially raising its per share offer price and creating the option for VGW shareholders to take their shares to the special purpose bid vehicle.
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