VGW owner seeking 100% of company
VGW Founder Pursues Full Ownership via Special Purpose Company Strategy
Laurence Escalante, the visionary founder and CEO of VGW, is poised to acquire full ownership of the company, which operates some of the leading online sweepstakes casinos globally, including Chumba Casino, Luckyland Slots, and Global Poker. Escalante’s initiative involves buying out the remaining 30% of VGW currently held by investors, aiming for a complete consolidation of ownership.
The acquisition strategy offers shareholders the opportunity to accept a buyout price of AU$5.05 per share (approximately US$3.28) or to exchange their shares for equity in a specially established purpose bid vehicle. This transaction, which values VGW at AU$3.3 billion (about US$2.14 billion), is crucial as the company navigates regulatory uncertainty in the U.S. regarding sweepstakes operations.
Recent legislative developments bolster the intensity of VGW’s situation. Louisiana has moved closer to joining Montana and Nevada in banning sweepstakes casinos, following a unanimous vote in the House. Additionally, Connecticut is on the verge of outlawing sweepstakes, pending the governor’s signature on SB 1235. In parallel, New York and New Jersey are advancing bills through their respective legislative bodies, prompting VGW to initiate a gradual phase-out of its sweepstakes platforms in New York.
Proposed Buyout: A Favorable Offer for Shareholders
In a detailed announcement on its website, VGW outlined the process leading to this buyout offer. The Lance East Office (LEO), responsible for establishing the special purpose bid vehicle, initially approached VGW about this transaction last November.
In response, VGW’s board instituted governance protocols to secure shareholder interests, which included forming an Independent Board Committee (IBC) and appointing Mike Symons from Canterbury Partners as a non-executive director. These measures reflect VGW’s commitment to transparency and accountability during the buyout process.
By January, LEO presented a non-binding proposal to acquire VGW with a cash offer estimated between AU$3.50 (US$2.27) and AU$4.00 (US$2.60) per share. However, the IBC deemed this initial offer inadequate, believing it did not accurately reflect VGW’s true market value.
As negotiations evolved, LEO significantly increased its offer, leading to the creation of a path for shareholders to transition their shares into the newly formed special purpose bid vehicle, enhancing the overall appeal of the buyout.
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