The DraftKings acquisition of Golden Nugget Online Gaming (GNOG) continues to be on monitor regardless of current delays, in accordance with GNOG chairman Tilman Fertitta.
The transaction was first introduced in August final yr, and one deadline to get it closed has already handed. Fertitta appeared on CNBC Wednesday and was requested whether or not the deal would shut by the most recent Could 31 deadline.
Fertitta prompt the deal was nonetheless on, although he didn’t decide to a particular timeline. He additionally admitted the all-stock transaction was not price USD1.5 billion.
The maths of DraftKings deal
Underneath the phrases of the deal, GNOG shareholders would obtain 0.365 shares of USDDKNG inventory for every share of GNOG.
When DraftKings was buying and selling at USD52 a share, because it was final August, these shares have been price USD1.5 billion. Nonetheless, on the present USD13.50 a share, the compensation is doubtlessly price round USD365 million.
Regardless, Fertitta stated the deal was nonetheless going forward as a result of GNOG’s worth dropped commensurately.
“It’s not simply DraftKings,” Fertitta stated. “Take a look at each different online gaming firm, it’s common. GNOG would probably be buying and selling like that additionally.”
USDDKNG to the moon?
Fertitta stays bullish on the long-term prospects of the DKNG inventory.
“I have a look at [DraftKings] as a long run maintain,” Fertitta stated. “I can be one of many largest shareholders of DraftKings. It’s a tech firm. You must do not forget that. It’s know-how. You’re going to search for in just a few years and will probably be like Amazon or Tesla or considered one of these different tech shares, and will probably be USD50 or USD100.
“Once they flip the nook like all tech corporations and develop into worthwhile, they develop into actually worthwhile. I noticed that for myself operating GNOG.”
Fertitta added with a smile: “I like that they are going to be funding the losses for the following few years.”
Fertitta stays constant
Feritta’s rhetoric is much like when the deal was first introduced. On the time, he described DraftKings because the “Coca-Cola of the area.”
“I needed solely inventory,” Fertitta stated. “I needed to experience this factor all the way in which up with these guys. That is the perfect administration group within the area.”
Fertitta owns roughly 46% of GNOG and agreed to carry his DraftKings inventory shares for at the very least a yr.
Deadline approaching
If the deal doesn’t full by Could 31, both get together can select to terminate the merger settlement. There’s a potential termination charge of USD55 million if the deal is terminated due to a “materials breach of obligations.”
DraftKings had not responded to an LSR query in regards to the causes for the delay on the time of writing.
Why is DraftKings shopping for GNOG?
DraftKings stated final yr the acquisition would assist it attain iGaming prospects who don’t essentially guess on sportsbook.
“We’re excellent at cross-selling sportsbook prospects into iGaming, however our database is especially male and centered on sportsbook,” DraftKings CEO Jason Robins stated. “GNOG’s database is almost 50/50 male to feminine and extra of that online casino clientele.”
DraftKings will retain the Golden Nugget casino model and run a multi-brand technique.
Golden Nugget is already operating on the DraftKings Sportsbook platform for Arizona sportsbook betting.