Golden Nugget shares soar 50% after $1.56B DraftKings deal

DraftKings plans to purchase on-line betting rival Golden Nugget Online Gaming for $1.56 billion, the businesses stated Monday — sending Golden Nugget’s inventory hovering greater than 50 p.c. 

Golden Nugget shares had been buying and selling at $18.56 shortly after market open on Monday, up an eye-watering 51.3 p.c from yesterday, in accordance with MarketWatch data. DraftKings shares ticked up 0.6 p.c to $51.90. 

If it closes, the all-stock acquisition will give DraftKings — which is primarily identified for fantasy sports activities and sports activities betting — larger entry to casino-style betting, the businesses stated in a release. Combining the companies will carry DraftKings greater than 5 million new prospects and create in $300 million in synergies, the businesses added. 

The deal has been permitted by the boards of each corporations and is predicted to shut within the first quarter of subsequent 12 months. 

As a part of Monday’s deal, DraftKings will type a brand new holding firm containing each DraftKings and Golden Nugget, which additionally owns the Landry’s Inc portfolio of eating places.

Golden Nugget
Golden Nugget shares had been up 51.3 p.c on the information.
SOPA Images/LightRocket by way of Gett

Golden Nugget shareholders will obtain 0.365 shares of New DraftKings’ inventory for every share held underneath the phrases of the deal. 

Billionaire Tilman Fertitta, who controls 46 p.c of Golden Nugget and likewise owns the Houston Rockets, will be part of the brand new agency’s board and has agreed to carry his shares for at the least one 12 months after the merger closes. 

DraftKings and Golden Nugget have each benefitted from rising demand for on-line betting fueled by the pandemic and the loosening of playing legal guidelines throughout the nation. 

However, a possible regulatory cloud is hanging over DraftKings’ head, with the announcement coming simply days after the corporate revealed it had obtained a subpoena from the Securities and Exchange Commission over allegations that it is exposed to an international “black market” and organized crime

DraftKings and Golden Nugget have both benefitted from growing demand for online betting fueled by the pandemic and the loosening of gambling laws across the country.
DraftKings and Golden Nugget have each benefitted from rising demand for on-line betting fueled by the pandemic and the loosening of playing legal guidelines throughout the nation. 
MediaNews Group by way of Getty Images

The accusations had been first made by short-seller Hindenburg Research, which issued a prolonged report in June on alleged misconduct centering round DraftKings’ 2020 merger with Bulgaria-based SBTech. 

The tie-up uncovered DraftKings to critical “black market” operations — together with SBTech’s observe file of working profitable unlawful playing companies in China, Vietnam, Thailand and Iran, in accordance with Hindenburg Research, which can be identified for brutal takedowns of corporations like Lordstown Motors, Nikola and Clover Health. 

In a Friday earnings release, DraftKings informed traders that it had obtained a subpoena from the SEC on July 9 “seeking documents concerning certain of the allegations raised in the Hindenburg Report.” 

The Hindenburg report initially despatched DraftKings shares plummeting 11 p.c to $44.95, however the inventory has since surpassed pre-report ranges.  

DraftKings has denied Hindenburg’s allegations, and the corporate performed down the importance of the SEC subpoena in a press release to The Post. 

“It is not uncommon for the SEC to investigate allegations in short-seller reports,” a DraftKings spokesperson stated. “The SEC inquiry does not suggest any wrongdoing or agreement with the short-seller allegations, and we intend to cooperate with the SEC inquiry.”

With Post wires

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