Earnings+More - Deal talk #5
Welcome to this month’s edition of E+M’s monthly newsletter Deal Talk, discussing what’s being spoken about away from the earnings announcements and analyst calls of the betting and gaming sector.
SPACs – the rise and fallThe gambling sector’s relationship with SPACs was more than just a brief flirtation. But with the market now all but dead, what is the verdict on the deals that got away – and the ones that didn’t? Dead and buried: DraftKings’ merger with Diamond Eagle Acquisition Corp, completed in April 2020, wasn’t just significant for the US gaming sector; its SPAC demerger is often cited as being one of the headline deals that helped kick off a cascade in the subsequent couple of years.
🟥 The number of SPAC mergers called off in 2022 After the goldrush: Following DraftKings, the gaming sector had some notable successes in the SPAC demerger race. It remains one of the more successful SPACs and, despite the share price ups and downs this year, it is still 49% ahead of its float price.
** SPONSOR’S MESSAGE** GiG is a leading gaming platform and sportsbook provider for online and land-based operators with digital aspirations. We deliver a full end-to-end solution through our award-winning iGaming and sportsbook solutions. Built for regulated markets and a top-class customer experience, GiG is pioneering the multi-platform era. If you are looking to expand your operations into new, profitable markets, our strategy is the solution. Find out more at sales@gig.com. Tainted loveGive me just a little bit more time: This mixed picture of post-SPAC performance on the part of gaming sector-related entities doesn’t help the prospects for any SPACs still seeking a merger target or indeed the already announced deals.
Nothing but a heartache: SPACs are “tainted by their very nature,” suggested one investment banking source. “There might have been some good companies that went the SPAC merger route, but the whole SPAC thing is under a cloud now.”
Private livesParched: Some of the problems with SPAC listings are specific – such as the tightening of the rules dictated by the SEC – but issues around raising money are also indicative of the wider issues caused by the IPO drought.
888’s debt strugglesAccording to reports, the banks who helped finance 888’s William Hill buyout have been offloading debt at a discount to get it off the books. In hock: As E+M reported yesterday, 888’s combined €332m bond sale and $75m term loan arrangement came at a price for the company’s bankers, who offloaded the junk debt at 84.5¢-87¢ on the dollar.
The month in transactions
Tilmann’s Wynn moveIn early November it emerged that Tilmann Fetitta was now a significant shareholder in Wynn Resorts. Fertitta, who himself has more than dabbled with SPACs, most obviously via Golden Nugget, ignited speculation with his 6% stake in Wynn, placing him just behind Elaine Wynn as the company’s largest single shareholder.
🏧 Wynn Resorts share price since Tilmann Fertitta bought a 6% stake Smoke/fire: Fertitta himself has said his investment is just that, but, as the consultant noted, “this is how it starts”.
What we’re readingExotics: Private equity seeks out liquidity as deals ebb. Contact
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888’s bankers take a haircut
Monday, December 12, 2022
Banks pay the price for 888 debt, the shares week, New York casino plans, 2023 analyst takes, startup focus – Livespins +More
Weekend Edition #76
Friday, December 9, 2022
$31bn-valued Fanatics' fund raise, MGM gets an analyst upgrade, sector watch – financial affiliates +More
The Startup Month #5
Tuesday, December 6, 2022
Gambling regtech's investment moment, Investor focus – Drive by DraftKings, Inside the raise – Dabble, November's fundraisings +More
Wynn’s November bounce
Monday, December 5, 2022
The shares month, World Cup balls, Betclic on the up, Ontario Lottery dressing down, startup focus – Prophet +More
Weekend Edition #75
Friday, December 2, 2022
VICI takes full ownership of two MGM properties, ESPN's sports-betting uncertainty, illegal betting survey +More
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