UK bookmaker seeks to convert its NYX convertible preference shares into ordinary shares, enabling it to vote on proposed Cdn$ 775 million deal
In a market advisory Wednesday, NYX Gaming addressed a possible complication in its proposed Cdn$ 775 million acquisition by US gambling group Scientific Games (see previous InfoPowa reports), noting that major shareholder William Hill has moved to change its NYX convertible preference shares into ordinary shares, enabling it to vote on the proposed agreement.
The advisory pointed out that William Hill is likely to use the converted equity – around 32 percent of NYX stock – to vote against the proposal in early December unless Scientific Games signs a commercial agreement to ensure continuity in William Hill sports betting operations.
InfoPowa readers may recall that last year the UK bookmaker contributed GBP 90 million to the GBP 270 million purchase price NYX paid to acquire Openbet, which powers the William Hill sports betting platform.
The NYX market advisory revealed that William Hill wants the rights to a copy of NYX source code and the benefit of certain anti-competitive arrangements in US jurisdictions.
NYX appears to be prepared to fight William Hill on the issue, pointing out that regulatory and licensing requirements may make it difficult to achieve the conversion in time for William Hill to deploy the resultant voting power it would have, and hinting that in any event NYX may be prepared to launch litigation against William Hill in a bid to protect NYX shareholders.
The prospect of such disruptions was almost immediately felt Wednesday, driving NYX shares down at least 15 percent, and a further 1.5 percent Thursday.
William Hill has responded with a statement noting NYX’s “apparent determination to frustrate the contractual rights” it acquired in the Openbet acquisition deal last year, and pointing out that its directors have yet to make a decision on its final plans regarding the Scientific Games proposed acquisition.
The statement also rejects any suggestion that it has demanded any anti-competitive arrangements.