The Stars Group sells NYX Gaming shares to Scientific Games

he latest twist in the Scientific Games/NYX Gaming merger, fellow online gaming company The Stars Group has announced that one of its subsidiaries, Stars Interactive Holdings Limited has finalised a securities purchase agreement with Scientific Games Corporation for its shares in the NYX Gaming Group.

Under the terms of the agreement, Stars Interactive Holdings have agreed to sell 5,617,716 ordinary shares in NYX together with 40,000 preference shares and 1,363,636 ordinary share purchase warrants which entitle Scientific Games to purchase further ordinary shares should they wish to do so.

Ordinary shares will be purchased at a cost of CDN $2.40 per share for an approximate price of CDN$35,500,992. Each Warrant has an exercise price of CDN$3.50, is exercisable into the same number of Ordinary Shares and expires on April 26, 2019.

This deal represents the entirety of Stars Interactive Holdings interest in the NYX Gaming Group, with the company divesting its entire shareholding in the business. Prior to the transactions, Scientific Games owned 11,600,000 Ordinary Shares, representing approximately 10.72% of the issued and outstanding Ordinary Shares.

As a result of the transactions, Scientific Games now owns 38,976,036 Ordinary Shares, representing approximately 36.01% of the issued and outstanding Ordinary Shares. If all of the Warrants acquired by Scientific Games were exercised, Scientific Games would own 42,511,214 Ordinary Shares, representing approximately 38.04% of the issued and outstanding Ordinary Shares.

A key motivator of this and a similar purchase deal conducted earlier this month is to ensure that Scientific Games completes its $631m acquisition of NYX Gaming, which had been under threat when UK bookmaker William Hill threatened to vote against the acquisition unless it was allowed to convert its preference shares into ordinary voting stock.

Both Scientific Games and NYX Gaming group have filed anti-trust lawsuits against William Hill, claiming that they are attempting to derail the merger, contravening US corporate laws to do so.

To further support the merger arrangement, Scientific Games and NYX Gaming have also amended their proposed merger agreement to state that in the event that the acquisition of NYX Gaming is not approved by its shareholders, Scientific Games will make a contractual takeover offer for the business at the same initial acquisition cost of $631m.