Scientific Games snaps up more shares of NYX
Gaming equipment manufacturer Scientific Games Corp. has invested an additional $69 million in NYX Gaming Group Ltd. and a subsidiary to bolster an attempted takeover bid should a Dec. 20 shareholder vote fail to approve the Las Vegas company’s $631 million acquisition of NYX.
Scientific announced just after midnight Eastern Standard Time Thursday that it has purchased 27.4 million shares of NYX stock, 3.5 million warrants to purchase additional shares and 40,000 preferred shares of NYX Digital Gaming Canada, a NYX subsidiary, which can be converted to 9.2 million ordinary shares.
Scientific announced Tuesday that it had purchased $21.3 million in shares.
NYX, a Toronto company with corporate headquarters in Las Vegas, has developed the OpenBet sports wagering platform used by the William Hill Group, a Gibraltar-based company that has a dominant position in the Nevada sportsbook industry. Scientific wants to enter the sports-betting business with the potential of legalized nationwide sports wagering looming in the United States next year.
William Hill, also a NYX shareholder, wants to block the acquisition unless it can receive assurances from Scientific on use of the OpenBet system. Scientific views the demand for assurances as anticompetitive.
Scientific acquired its securities Friday from four NYX shareholders for $2.40 a share in Canadian currency.
If all the warrants are exercised and all of the preferred stock is converted to ordinary shares, Scientific would hold a 41 percent ownership position in the company, up from 10.7 percent prior to the transaction.
The purchase solidifies Scientific’s share position for a takeover bid if a shareholder vote next month fails to approve its acquisition of NYX, which was announced Sept. 20.
Scientific shares, trading near their 52-week high share price, closed down 0.6 percent, 30 cents a share, Friday to $51.70 in light trading.
Contact Richard N. Velotta at rvelotta@reviewjournal.com or 702-477-3893. Follow @RickVelotta on Twitter.
NYX timeline
Early 2016: Gibraltar-based sports wagering company William Hill Group invests in NYX Gaming Group, a Canadian software company that produces the OpenBet wagering platform.
April 2016: William Hill increases its position in NYX by acquiring preferred stock that gives the company the equivalent of a 31.9 percent ownership position.
2017
June 27: U.S. Supreme Court agrees to hear Christie v. NCAA, a case based on the Professional and Amateur Sports Protection Act, which bans sports wagering in all but four states, including Nevada.
Sept. 20: Las Vegas-based Scientific Games announces plans to acquire NYX for $631 million (U.S.)
Nov. 2: In an earnings call, Scientific executives express optimism about entering the sportsbook market with its acquisition of NYX.
October-November: William Hill seeks assurances on the use of OpenBet. Scientific considers William Hill's bid for assurances anticompetitive.
Nov. 21: Scientific announces purchase of $21.3 million in NYX shares with the intent of a corporate takeover if shareholders don't approve the acquisition.
Nov. 24: Scientific announces purchase of another $69 million in NYX shares.
Dec. 4: Scheduled oral arguments on Christie v. NCAA by the Supreme Court. A decision is anticipated in 2018.
Dec. 20: Scheduled shareholder vote on acquisition. By law in Guernesey, a Crown dependency in the English Channel Islands where NYX was incorporated, an acquisition vote requires 75 percent approval. Approval of a takeover bid requires majority vote.
