GAN Limited, a leading North American B2B technology provider of real money internet gaming solutions and a leading International B2C operator of Internet sports betting, announced that the company has entered into a definitive Agreement and Plan of Merger with Sega Sammy Creation Inc., a wholly-owned subsidiary of Sega Sammy Holdings, Inc., an international conglomerate operating in the entertainment, gaming and resorts businesses.
Under the merger agreement, at the effective time of the merger, each of GAN’s issued ordinary shares will be converted into the right to receive in cash $1.97 per share, which reflects a premium of 121% over the closing price of GAN’s ordinary shares on 7 November 2023, the last trading day prior to the date of this announcement.
“After a thoughtful review of value creation opportunities available to us, we are pleased to have reached this agreement with SSC,” said Seamus McGill, Chairman and Interim Chief Executive Officer of GAN. “Market share concentration in the U.S. B2C space, a slower than expected adoption of regulated online gaming in the U.S., along with changes to key customer contracts make the near-term operating environment challenging without ample capital resources. Sega Sammy has those resources and GAN is a strategic complement to their existing gaming portfolio. We believe this all-cash offer, at a substantial premium to recent trading prices, is the value-maximizing path for our shareholders.”
The proposed merger is subject to the approval of GAN shareholders. The company will ask its shareholders to consider and vote to approve the Merger Agreement at a Special Meeting of Shareholders, which is expected to be held no later than 31 March 2024.
Completion of the merger is not subject to a financing condition but is subject to the accuracy of the representations and warranties, performance of the covenants and other agreements included in the Merger Agreement, and customary closing conditions for a transaction of this type, including notification or approval with various gaming regulatory authorities. Assuming satisfaction of those conditions, the Company expects the merger to close during the fourth quarter of 2024.
If the merger is approved by GAN’s shareholders and is completed, all outstanding GAN ordinary shares will be acquired for $1.97 per share in cash; GAN’s ordinary shares will no longer be subject to public reporting requirements under the Securities Exchange Act of 1934; and its ordinary shares will no longer trade on any market. Upon completion of the merger, GAN will become a wholly owned subsidiary of SSC.
The GAN board of directors formed a special committee, comprised solely of independent directors, to consider the transaction and to negotiate the price per shares and the terms of the Merger Agreement, with the assistance of financial and legal advisors. Based on the unanimous recommendation of the special committee, the GAN board of directors determined that the $1.97 price per share constitutes fair value for each company ordinary share, and determined that the terms of the Agreement, the merger and the other agreements and transactions contemplated by the Merger Agreement are in the best interests of the company and its shareholders.