Landcadia Amends Voting Requirement to Seal Golden Nugget Online Deal

Posted on: December 21, 2020, 11:01h. 

Last updated on: December 21, 2020, 11:22h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Landcadia Holdings II, Inc. (NASDAQ:LCA) is taking steps to ensure it’s able to finalize its merger with Golden Nugget Online Gaming (GNOG). It is amending the purchase agreement to shorten the odds the transaction passes at an upcoming shareholder meeting.

Landcadia Amendment
Tilman Fertitta seen here in a 2012 interview. His Landcadia Holdings SPAC is changing an amendment to finalize a merger with Golden Nugget Online Gaming. (Image: GNOG)

Last week, the special purpose acquisition company (SPAC) co-owned by Tilman Fertitta and investment bank Jefferies held a virtual meeting where investors voted on the combination with GNOG. While approximately 99.8 percent of the shareholders that attended the get-together voted in favor of the transaction, not enough ballots were cast to make the deal official. Entering the Dec. 18 meeting, Landcadia bylaws required at least half the shares outstanding needed to be voted. But the figure was closer to 40.5 percent.

As a result, that conference was adjourned until Dec. 29. Now, Landcadia is taking action to move the merger along, modifying its shareholder agreement “to provide increased certainty that the Business Combination” (will be approved) at next week’s meeting.

The company believes the amendment is in the best interests of its stockholders, given the significant increase in the price of the company’s Class A common stock since the announcement of the business combination, and the overwhelming support of the business combination by stockholders who have voted thus far,” according to a statement issued today by the SPAC.

Fertitta, his affiliates, and Jefferies already voted in favor of the proposal, which will see Golden Nugget Online become a public company trading on the Nasdaq under the ticker “GNOG.” Fertitta will have 53 percent beneficial ownership of the iGaming company and serve as its chief executive officer.

Analyzing the Amendment

The new amendment states that at the upcoming shareholder meeting, the Landcadia/GNOG merger needs to garner affirmative votes on a majority of the shares outstanding present at the Dec. 29 event, rather than more than half of the overall investor base.

That’s an important step in this situation, because 70 percent of Landcadia’s stockholders are retail, a group known for not actively participating in corporate votes. The blank-check firm acknowledged that was a primary reason the transaction wasn’t wrapped up last week.

Another stipulation in the amendment is the “proposal to approve an amended and restated certificate of incorporation of the company must receive the affirmative vote of a majority of our outstanding shares of common stock, rather than a majority of the outstanding shares of Class A common stock held by disinterested stockholders,” according to Landcadia.

Next Steps

It’s been six months since Landcadia announced plans to combine with GNOG, providing a platform for the latter to go public. The transaction values the online casino company at $745 million, or 6.1x the target’s estimated 2021 revenue of $122 million.

Enthusiasm for the SPAC equity and the debut of GNOG are palpable, because the company is profitable, a rarity among emerging growth and online gaming firms.

Assuming the aforementioned amendment does the trick and the merger is approved on Dec. 29, it could be early January when Golden Nugget Online makes its debut as a public company.