Luckbox rejects merger and “wind-down” proposals from investor

Real Luck Group, the operator behind Luckbox, has officially declined two proposals from Adam Arviv, co-founder of Bragg Gaming Group, both of which raised substantial concerns for the company’s future.

Real Luck Group characterized Arviv as an “activist investor,” highlighting his attempts to influence the company’s direction through two distinct proposals. The first proposal suggested a merger with a “private gambling company,” valuing Luckbox at CA$0.09 per share. This figure is slightly below the recent closing price of CA$0.10 per share reported on October 27.

Subsequently, it appears that Arviv modified his stance, proposing instead to wind down the operations of Luckbox entirely. This proposal has raised eyebrows at Real Luck Group, which argues that it disregards the company’s recently finished platform and a burgeoning player base.

The board of directors at Real Luck Group firmly stated that both proposals “would not be in the best interests of the company and its shareholders.” They emphasized that neither proposal accurately captures the true value of the company’s significantly expanding operations and is in stark contrast to its favorable financial standing.

“Neither proposal reflects the value represented by the company’s significantly growing business and is also well below the company’s net cash position,” the board clarified. “We believe the company is undervalued. Real Luck Group is in a robust financial position, carrying no debt, and is set on a strategic path to achieve profitability and scalable growth within the next six to ten months.”

Real Luck Group’s strong cash reserves make it an attractive target for opportunistic investors like Arviv, who may seek to exploit its liquidity without regard for stakeholder interests. “The board has a fiduciary duty to resist such opportunistic conduct,” they concluded, underscoring their commitment to the company’s longevity and stakeholder welfare.

In light of the situation, the Real Luck Group board has engaged McMillan LLP as legal counsel to navigate this dynamic landscape. They have also expressed a willingness to engage in discussions with Arviv as a shareholder, although an initial meeting request was declined by him.

This unfolding situation at Real Luck Group sheds light on the complexities and challenges facing modern operators in the gambling industry. As competition intensifies and regulatory landscapes shift, maintaining a clear strategic direction while ensuring shareholder interests remain a priority is essential for sustainable growth.