VGW’s Ambitious Plan for Complete Ownership Through Special Purpose Vehicle

Laurence Escalante, the visionary founder and CEO of VGW, is on the brink of expanding his influence over the company by purchasing the remaining 30% stake owned by investors. This move would elevate his ownership to a full 100%, positioning VGW to strengthen its operations in the competitive online gaming sector.

VGW is well-known for operating major online sweepstakes platforms like Chumba Casino, Luckyland Slots, and Global Poker. Current shareholders now have a choice: they can accept AU$5.05 per share (approximately US$3.28) or opt for shares in a newly established special purpose vehicle. This buyout proposal values VGW at around AU$3.3 billion (US$2.14 billion) as it navigates the evolving regulatory landscape across various U.S. states.

Recent legislative developments indicate that states like Louisiana are moving closer to banning sweepstakes casinos altogether, following an overwhelming vote in the House. Meanwhile, Connecticut is poised to follow suit, pending the Governor’s approval of SB 1235. Both New York and New Jersey are also contemplating similar measures, influencing VGW’s decision to gradually phase out its sweepstakes offerings in New York.

Enhancing Shareholder Value

In a detailed announcement on VGW’s website, the company outlined the rationale behind this buyout initiative. Last November, Lance East Office (LEO) expressed interest in acquiring VGW, which triggered the company’s board to implement strict governance measures to prioritize shareholder interests. This included forming an Independent Board Committee (IBC) and appointing Mike Symons from Canterbury Partners as an independent non-executive director.

Initially, LEO proposed a non-binding offer ranging from AU$3.50 (US$2.27) to AU$4.00 (US$2.60) per share, which was met with resistance by the IBC, citing a significant undervaluation of VGW. Following this, negotiations ensued, resulting in LEO significantly improving its offer and presenting shareholders the chance to participate in the special purpose vehicle.

For further insights on this story, read here.

Casino Reports is an independent publication dedicated to delivering news and analysis on the regulated U.S. online casino and igaming sector, covering the latest developments in legislation, business, and industry trends.